IN THE MATTER OF ARBITRATION
UNITED STATES POSTAL SERVICE
NATIONAL ASSOCIATION OF LETTER CARRIERS, AFL-CIO
(Case Nos. Q90N-4F-C 94024977/94024038)
(NALC NO.: 94/002)
ANALYSIS AND AWARD
This matter came for hearing pursuant to a collective bargaining agreement between the parties effective from June 12, 1991 through November 20, 1994. A hearing occurred on April 2, 1996 in a conference room of Postal Service headquarters located at 955 L'Enfant Plaza S.W., in Washington, D.C. Mr. John W. Dockins, Labor Relations Specialist, represented the United States Postal Service. Mr. Bruce H, Simon of Cohen, Weiss, & Simon in New York City represented the National Association of Letter Carriers. The hearing proceeded in an orderly manner. There was a full opportunity for the parties to submit evidence, to examine and cross-examine witnesses, and to argue the matter. All witnesses testified under oath as administered by the arbitrator. The advocates fully and fairly represented their respective parties. A court reporter for Diversified Reporting Services, Inc. reported the proceeding and submitted a transcript of 180 pages.
The parties stipulated that the matter properly had been submitted to arbitration and that there were no issues of substantive or procedural arbitrability to be resolved. The arbitrator officially closed the hearing on July 5, 1996 after receipt of the final post-hearing reply brief in the matter.
II. STATEMENT OF THE ISSUE
The issue before the arbitrator is as follows: Does the Joint Statement on Violence and Behavior in the workplace constitute an enforceable agreement between the parties so that the Union may use the negotiated grievance procedure to resolve disputes rising under the Joint Statement? If so, what is an appropriate remedy?
III. RELEVANT CONTRACTUAL PROVISIONS ARTICLE 3 MANAGEMENT RIGHTS
A. The Employer shall have the exclusive right, subject to the provisions of this Agreement and consistent with applicable laws and regulations: B. To hire, promote, transfer, assign, and retain employees in positions within the Postal Service and to suspend, demote, discharge, or take other disciplinary action against such employees.
IV. STATEMENT OF FACTS
In this case, the Union challenged the decision of the Employer to treat the Joint Statement on Violence and Behavior in the Workplace as something other than a contractual commitment between the parties. The dispute arose as an aftermath of several violent incidents in the workplace and, in particular, the "Royal Oaks" incident in which an employee killed postal supervisors after receiving an unfavorable arbitration award. The two cases before the arbitrator advanced to the national level when two local branches of the National Association of Letter Carriers filed individual grievances alleging harassment of letter carriers by supervisors and requesting that the supervisors not be allowed to direct the work of letter carriers.
The parties consolidated the two grievances, and a full hearing occurred at the regional level on April 21, 1995. The Union contended that the Joint Statement on Violence and Behavior in the Workplace constituted a contract between the parties which set forth standards of behavior for supervisors. The standards set forth in the Joint Statement on Violence and Behavior in the Workplace allow an arbitrator to deny a supervisor managerial authority over letter carriers, according to the Union.
The Employer responded that Article 3 of the parties' agreement established exclusive rights for the Employer "to hire, promote, transfer, assign, and retain employees," and it is the belief of the Employer that those exclusive rights remain unaltered by any other document about which the parties may have held discussion. It is the belief of the Employer that the Joint Statement on Violence and Behavior in the Workplace constitutes a pledge by the Employer to take action that will reduce violence in the workplace.
The different perspectives advanced through the parties' grievance procedure to the national level. When the parties were unable to resolve their differences, the matter proceeded to arbitration.
POSITION OF THE PARTIES
A. The Union
The Union states unequivocally that the Joint Statement on Violence and Behavior in the Workplace constitutes a contract between the parties. The Union asserts that, because of violent circumstances that led to drafting the Joint Statement, the parties intended to negotiate an agreement which required both parties to give up something in a mutual effort to obtain a safer working environment.
The Union maintains that the Joint Statement was made by the parties in an effort to indicate a clear-cut break from past behavior. The Union believes that language in the Joint Statement clearly and unambiguously represents a contractual promise by both sides to work relentlessly in an effort to end violent behavior in the workplace. The Union claims that, when its members are disciplined for violent acts, the Joint Statement is often cited in support of the Employer's disciplinary action against workers. In return, the Union asserts the Employer has agreed in the Joint Statement that supervisors who use violent tactics should also be disciplined. The Union contends that the grievance arbitration procedure is the appropriate forum for determining whether a supervisor should be disciplined for violating the Joint Statement.
B. The Employer
The Employer claims that, when management signed the Joint Statement, the parties never intended the document to be contractually binding in the same way as the National Agreement. Instead, the Employer argues that it made a pledge to take more concerted action against violence in the workplace. Management contends that there is no evidence at all of any intent to give away the Employer's exclusive managerial authority under Article 3 of the parties' collective bargaining agreement.
The Employer also contends that there were insufficient contractual formalities present to give rise to an enforceable obligation, The Employer maintains that the Joint Statement at no point shows an intent by the parties to be contractually bound. Moreover, management asserts that it received no consideration for a right of the Union to use the grievance procedure in order to prevent a supervisor from managing letter carriers. Accordingly, the Employer concludes that the grievance must be denied.
A. Altering a Right of Management
The right of management to manage is fundamental in the collective bargaining relationship. Such authority is crucial if management is to run an efficient organization and is to advance the agency toward a successful accomplishment of its mission. As one observer commented decades ago, "in the business organism there can be only one mind and only one nerve center if the various parts are to be coordinated into a harmonious whole." (See, Chamberlain, The Union Challenge to Management Control, 134 (1948)). Care must be taken not to undermine management's commitment to operate the organization efficiently.
The parties have codified the rights of management in their agreement with each other, and they specifically recognized management's exclusive right "to hire, promote, transfer, assign, and retain employees in positions within the Postal Service and to suspend, demote, discharge, or take other disciplinary action against such employees." (See, Joint Exhibit No. 1, p. 5). The Employer argued that an asserted right of the Union to use the grievance procedure to remove or suspend supervisors might impinge on exclusive managerial prerogatives. The question is whether or not the parties have amended such managerial rights by entering into the Joint Statement on Violence and Behavior in the Workplace.
It is the position of the Union that the parties have the power to alter their contractual obligations to each other by using methods that extend beyond the traditional negotiation process typically implemented to bring a labor contract into existence, Relying on U.S. Supreme Court precedents, the Union concluded that binding contractual obligations need not result only from a collective bargaining agreement in order to constitute an enforceable contract. (See, e.g., Retail Clerks Int'l Ass'n v. Lion Dry Goods, Inc., 369 U.S. 17 (1962)). The Employer, on the other hand, maintained that there needed to be a specific "negotiated change" to the parties' collective bargaining agreement in order to modify managerial prerogatives. (See, Employer's Post-hearing Brief, 11),
The parties' straightforward problem implicates a fundamental question of gargantuan proportions, namely, what constitutes a contract? Scholars have filled library shelves addressing the question, and students have puzzled over the issue for hundreds of years. While circumstances and the form of a labor contract may be different, no special set of criteria has evolved in the common law protecting the existence of a labor contract. The Restatement (Second) of Contracts, a highly regarded source of guidance for understanding contracts, defines a "contract" as follows:
A contract is a promise or a set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty. (See, SS 1, p. 5 (1981)). The question is whether or not the parties made binding promises to each other in the Joint Statement and whether or not the parties intended to create legal duties to perform promises to each other, If so, there are enforceable remedies when a promise is broken. By "promise" is meant "a manifestation of intention to act or refrain from acting in a specified way, so made as to justify a promise in understanding that a commitment has been made." (See, Restatement (Second) of Contracts, SS 2(1) p. 8(1981)). To test the "manifestation of intention to act "an objective standard is used; and undisclosed intentions receive little or no consideration.
One ordinarily would expect to find a collective bargaining agreement reduced to writing and executed by both parties. This is more an evidentiary issue than anything else. (See, e.g., Georgia Purchasing, Inc,, 95 LRRM 1469 (1977); and Diversified Services, Inc., 293 LRRM 1068 (1976)); One also would expect a labor contract to contain promises concerning economic issues or conditions of employment. One would expect the parties to provide guidance in an agreement that helps govern "their day-to-day relations" and a broad "stability to the bargaining relationship." (See, J.T. Sand and Gravel Co., 91 LRRM 1187 (1976)). In evaluating an agreement between parties, the U.S. Supreme Court concluded that:
'Contract' in labor law is a term the implications of which must be determined from the connection in which it appeared. It is enough that this is clearly an agreement between employers and labor organizations significant to the maintenance of labor peace between them..It's terms affect the working conditions of the employees. . It resolves a controversy arising out of, and importantly and directly affecting, the employment relationship. (See, Retail ClerkInt'l Ass'n v. Lion Dry Goods, 369 U.S. 17 (1962), emphasis added). It is clear the U.S. Supreme Court believes that the term "-contract" embraces not only traditional collective bargaining agreements but also other documents negotiated between the parties such as "statements of understanding" drafted, for example, as a method of settling a strike. While recognizing that long established definitions of a "contract" apply to a labor agreement, it also must be recognized that the context and character of a collective bargaining agreement are different from a contract in a typical commercial transaction. The eminent Archibald Cox observed many years ago that:
It is not unqualifiedly true that a collective bargaining agreement is simply a document by which the union and employees have imposed upon management limited, express restrictions of its otherwise absolute right to manage the enterprise, so that an employee's claim must fail unless he can point to a specific contract provision upon which the claim is founded. There are too many people, too many problems, too many unforeseeable contingencies to make the words of the contract the exclusive source of rights and duties. One can not reduce all the rules governing a community like an industrial plant to fifteen or even fifty pages. Within the sphere of collective bargaining, the institutional characteristics and the governmental nature of the collective-bargaining process demand a common law of the shop which implements and furnishes the context of the agreement. (See, 72 Harv. L. Rev. 1482, 1498 (1959)r Emphasis added. The U.S. Supreme Court later quoted these words of Professor Cox in the Steelworkers' Trilogy. (See, United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574 (1960)):
There, of course, is an expectation that parties will have followed conventional methods of bargaining in order to create their. set of promises to each other. At the same time, there is an institutional character to a collective bargaining agreement that often makes it difficult to apply judge-made principles of the common law in the way they might be applied to a lease contract or a contract to sell a farm. The nature of a collective bargaining agreement as a system of self-government must not be forgotten, and the ongoing nature of the relationship between the parties may cause them loosely to draw their agreements and to add to or modify them more so than might be the case in a standard commercial transaction. Moreover, contract law itself generally has evolved in ways that makes it easier to modify agreements. For example, a modern approach to contract modification is set forth in Restatement (Second) of Contracts which states:
A promise modifying a duty under a contract not fully performed on either side is binding if the modification is fair and equitable in view of circumstances not anticipated by the parties when the contract was made. (See, SS 89r p. 237 (1981)).
A lack of classical formalities will not be dispositive in a dispute about contract modifications between knowledgeable parties engaged in an ongoing transaction.
B. Meaning of the Joint Statement
The Employer argued that the parties did not intend the Joint Statement on Violence and Behavior in the Workplace to constitute an enforceable contract. As mentioned previously, an objective theory of assent to an agreement is used to determine whether a contractually binding offer has been made and accepted. Through the intellectual force of Judge Learned Hand and Professor Arthur Corbin, an objective assessment of the parties' intention carried the day, and it is the intention of the parties as judged by external or objective appearance that is used to evaluate whether the parties entered into an agreement. As Judge Hand observed, "a contract is an obligation attached by the mere force of law to certain acts of the parties, usually words, which ordinarily accompany and represent a known intent." (See, Hotchkiss v. Nat'l City Bank, 200 F. 287, 293 (1911)). Judged by an objective appearance of intentions, the question is whether parties manifested an intent to agree.
In testing whether promises exchanged by parties constituted a binding promise, a hope, a prediction, or even a pledge, it is appropriate to apply a standard of reasonableness and to ask whether a reasonable person, judging objectively, would conclude that the parties intended their words to constitute a binding promise. Even if one party intended to make a pledge and the other party intended to offer a binding promise, a reasonable person, judging objectively, must ask whether the party offering a binding promise had reason to know of the other parties' undiscussed intention merely to make a pledge. In this context, a "pledge" is used as a nonbinding expression of opinion; but it is recognized that one definition of "pledge" is "a binding promise."