|# Calls||Written||Samples||#Prosp.||GO lead||$Sold||TOTAL#|
|# Calls||Written||Samples||Prospects||GO Lead||Sold|
|# > Stelse||25||59||42||56||9||34|
|# < Stelse||72||0||27||15||19||56|
|# = Stelse||3||41||31||29||72||10|
With the 186 incidents of equivalent performance providing the range, Stelse ranks between 31st and 62nd percentile (189/600 and 375/600, respectively).
Hamilton testified that in reviewing the record book to determine if the sales calls which Stelse claimed were made were also recorded, he determined they were not. Eliminating that column of data leaves the following summary:
Data Excluding # Calls
With the 183 incidents of equivalent performance providing the range, Stelse ranks between the 23rd and 60th percentile (117/500 and 300/500, respectively).
For the period from two weeks prior to the PIP 5 to Stelse's last full week, the loss and ruin data for six districts in Market Centers 614 and 624 were as follows:
|Stelse Loss & Ruin YTD (%)||13.7||13.6||13.5||13.4||13.3||10.3||11.8|
|Dist. 902 Loss & Ruin YTD (%)||11.7||11.7||11.7||11.7||11.6||11.9||11.5|
|MC 614/624 Loss & Ruin YTD (%)||11.5||11.5||11.5||11.5||11.5||11.3||11.2|
|# Rtes > Stelse||6||6||7||7||7||20||13|
|# Rtes < Stelse||33||33||32||32||32||19||26|
* This figure represents the averages for districts 899, 901, 902, 910, 909 and 906, divided by six. The data is found at Ex. ER 1, tab 18. The company, which prepared the exhibit, did not explain why data from district 908, part of Market Center 614, was not included in the statistical summary, nor why data from Market Center 624 (which apparently includes districts 906,909 and 910) was. The data cells "# Rtes. > Stelse" and "# Rtes. < Stelse" show the number of individual route drivers whose statistics were better and worse, respectively, than Stele's, based on company witnesses testifying that 12.5% was the target for loss and ruin, with a higher number being better than a lower one.
The company is also concerned that existing contracts not be allowed to lapse, and tracks RSR and district performance in renewals. The company also set a specific standard for Stelse in the PIP. As of the end of the company's third quarter, June 30, 31.5% of Stelse's contracts had expired, meaning that he was delivering without a current contract. Of the 26 other RSR's, only one had a higher percentage of expired contracts. At the end of the company's fourth quarter, September 30, Stelse again had the second highest percentage of expired contracts, at 25.8%. The district-wide non-renewal percentages during the third and fourth quarter were 22 and 21, respectively.
Toward the end of September, Ross determined that Stelse's performance was failing both the normal RSR standards and the higher standards of his personal PIP, and so the company would have to terminate him. Ross also relied, to a degree he can't quantify, on the coaching log. 5/ In deciding to fire Stelse, Ross did not inquire into the company's recent practice in disciplining employees for sales activity problems. Hamilton, who participated in and supported the decision, held a termination meeting with Stelse, O'Malley and Stelse's direct supervisor, route manager Jeff St. Arnold, on October 14. The company did not inform local 695 of the termination meeting, nor provide a copy of a termination notice until October 29, at an initial grievance meeting. According to Schultz' unrebutted testimony, the notice the company provided him on October 29 was limited to a statement that Stelse had been terminated as of a certain date, and did not include any further explanation of the discharge. The termination notice itself is not part of the record.
5/ Ross' testimony on cross-examination gives insight into the company's decision-making process regarding Stelse's termination:
A: The Coaching Log and the Performance Improvement Plan, that's what I used to make my decision.
Q: Did you advise the Union that you were relying on the Coaching Log?
A: No. The Coaching Log had been created prior to my coming here. My decision was based on the Coaching Log and the Performance Improvement Plan.
. . .
Q: What weight did you give the Coaching Log?
A: I'm not sure how to express my answer here. A lot, a little? I can't answer.
Q: You don't know?
A: I'm not sure in what terms to express it.
Q: Well, would you have terminated him if there hadn't been a Coaching Log?
A: I can't speak to that. I can't say.
Q: So it affected you some way, but you just don't know how much?
On August 14, 2001, Ross' predecessor as general manager of Market Center 614, Scott Fish, had written to the district managers as follows:
Subject: Route Sales/Disciplinary Notices
Guys's I need you to meet with your RSR's this week to inform them that we will as a Market Center, be focusing in on each individual RSR's monthly installed sales results..Starting with August's results the disciplinary procedure will be put into place (they got a bye for July). The first warning will be a Verbal Written, if the RSR falls below the $7 dollar mark the next month a First Written will be issued, if the RSR misses the mark in the following month a Final Written will be issued with a 3 day suspension (T, W, H). If the RSR falls below the mark again for the next month he will be termed.
I will be reviewing each District's total route sales results each month and for those districts under the $7.00 average per route the DM will be subject to the above mentioned actions.
Sometime later (the email in the record is undated, but refers to a new directive "starting the week of 9/03/02,") Fish wrote to again exhort the district managers to generate greater productivity in all areas from the route representatives. Fish wrote, in part:
I will be reviewing these reports each week. For those routes whose credits exceed 40%the RSR will be written up by the DM.. Written warnings will follow the same format we're using for our route sales.
. . .
Garment Upgrade Activity
. . .
Any routes that do not hit their required allotment of upgrades will follow the written warning process. (emphasis in original).
Other than conversations they might have had with their district managers, there is no indication in the record that route representatives were aware of the details of the Fish correspondence contemporaneously. Schlultz did not learn of the correspondence until he received the material anonymously during his investigation of this grievance.
From September 12 to September 19, 2001, five RSR's, including Stesle, received Verbal Warnings for inadequate route sales performance in August, which warnings were memorialized on disciplinary notices as described above. Two RSR's had weekly averages that month of $0.00; one averaged $1.75; another averaged $4.75; Stelse averaged $6.50. On September 18, 2001, Schultz wrote Fish as follows:
I have been informed of the Company's initiation of discipline to members in regard to sales.
The Company removed language requiring minimum sales during the last negotiations because they don't discipline for lack of sales anyway. Now, with no reference to sales requirements in the contract, the Company is issuing discipline.
The Union disagrees with the Company's action and requests that all current discipline be removed from the record of the employees involved. Also, the Union requests that this practice be discontinued.
Please consider this letter a grievance on behalf of the bargaining unit for all
On September 27, 2001, Fish replied to Schultz as follows:
. . .
It has been this Market Center's position, as well as the company's, that Route Sales are a fundamental responsibility of a Route Sales Representative. And that those Route Sales Representatives who do not perform up to a minimum standard will be dealt with accordingly.
If you would like to review any Route in particular, pertaining to their sales and disciplinary notices, please contact me to arrange a meeting.
On October 19, 2001, Schultz replied to Fish, in part, as follows:
The Union has not change(d) its position regarding the unilateral implementation of a disciplinary policy regarding sales. This is a violation of the contract and the Union does not recognize the Company's policy.
. . .
The union did not file or process any formal grievances on matters referred to in the correspondence quoted above.
Further facts and statistics will be noted in the discussion below, as necessary.
POSITIONS OF THE PARTIES
In support of its position that the grievance should be sustained, the union asserts and avers as follows:
Because the company did not provide Local 695 with notice of the alleged warning which led to the grievant's termination, the discharge is procedurally defective and must be overturned. The negotiated language in the collective bargaining agreement mandates that at least one written warning notice shall be given to both the union and to the employee prior to any discharge or suspension. Despite this clear language, the company failed to provide the union with a copy of the Performance Improvement Plan it claims constitutes a written warning and which it subsequently relied upon to discharge the grievant. It is not sufficient for the company to claim the spirit of the requirement was satisfied by its having given a copy to union steward O'Malley; arbitrators have consistently held that stewards have no authority to bind the union or modify an
agreement. Nor do stewards have the ability to interpret the collective bargaining agreement on behalf of the unit or in the name of the local. The company was obligated to provide a copy of the discipline to the union business steward, who alone has the authority to bind the union. The company's failure to follow the procedural requirement invalidates the discharge and requires the grievant be reinstated and made whole.
Further, the company failed to provide Stelse with a written warning notice prior to his discharge, in violation of section 12.2 of the collective bargaining agreement, which requires that at least one written warning notice be given to the union and employee before discharge or suspension. Despite the company's arguments, the Performance Improvement Plan was not disciplinary action and did not satisfy the prior notice provision of section 12.2; without such prior written warning, the termination lacked just cause and must be reversed.
There is no indication on its face that the Performance Improvement Plan is formal discipline for the purposes of section 12.2, nor did the company inform Stelse and steward O'Malley as such during their September 6, 2002 meeting. The document does not resemble the traditional disciplinary forms the company had used in the past, contains no identification as a disciplinary notice, and does not include references to progressive discipline as found on true disciplinary notices. Even if the company intended the PIP to serve as written warning, Stelse was clearly not put on notice of such by simply reviewing the written document.
Nor did the company provide such notice during the meeting at which he received the Performance Improvement Plan. Stelse and O'Malley testified credibly that District Manager Hamilton had not referred to the PIP as discipline; while Hamilton testified that he had indeed said so, inconsistencies in his testimony call his credibility into question.
The company portrayed the PIP as guidelines meant to assist Stelse achieve the company's average sales goals; without any of the hallmarks of formal discipline, the company cannot rely on the PIP as the prior written notice necessary before suspension or termination. Because the company thus failed to issue Stelse the written warning notice required under 12.2 of the collective bargaining agreement, his discharge lacked just cause and must be reversed.
Further, the Performance Improvement Plan imposed unreasonable expectations, and cannot be the basis for discharge. It is well-established that an employer cannot unilaterally impose an excessive workload on employees; an employer
therefore does not have just cause to discipline an employee for failing to meet an unreasonable workload requirement. The PIP the company relies on would have required Stelse to work far more than 40 hours per week. Not only were the PIP requirements objectively unreasonable on their face, they were clearly out of proportion to the activity that was acceptable from the other Route Sales Representatives. District Manager Hamilton himself admitted that the PIP required Stelse to meet standards above those set for all other employees; in fact, Stelse's requirements under the PIP were double the standards set for the other RSR's. The company clearly lacked just cause for terminating Stelse after he failed to achieve an unreasonable activity level.
Notwithstanding how unreasonable the company's expectations were, Stelse made significant strides toward improving his performance and should not have been terminated. Stelse's primary responsibility was to maintain his existing accounts and sell new accounts, not make sales calls and submit written proposals. And after receiving the PIP, Stelse vastly improved his sales performance, and in fact far outperformed most of his peers in the sales average category. Because the Performance Improvement Plan set expectations that were both excessive and irrelevant, and because Stelse made significant measurable improvement toward the goals set, Stelse's inability to attain the company's unreasonable expectations do not constitute just cause for discharge.
Further, the company violated past practice when it failed to follow progressive discipline and discharged Stelse for failing to meet certain activity levels. The current collective bargaining agreement eliminated a prior memorandum of understanding under which the company could discipline for failure to meet sales quotas, setting a new standard of "consistent and reasonable effort" - yet all of the company's complaints about Stelse relate to alleged performance failures, rather than the effort he gave. Since the company cited sales numbers as the basis for the PIP and subsequent discharge, and failure to meet sales quotas are no longer a basis for discipline, the termination must fail.
Moreover, the company failed to follow its past practice of applying progressive discipline for alleged deficiencies in sales numbers. In 2001, the prior General Manager informed district managers that a system of progressive discipline would be used for employees' failure to meet sales averages. Although the company failed to offer any evidence this practice had been discontinued, the company failed to follow its own disciplinary procedures in disciplining Stelse. The company did not have just cause to discharge Stelse for a second offense when pursuant to its policy of progressive discipline a written warning was the next step.
Because the discharge was without just cause on several grounds, the grievance must be sustained and Stelse reinstated and made whole for all wages and benefits lost.
In support of its position that the grievance should be denied, the company asserts and avers as follows:
A routes sales representative's failure to meet sales expectations constitutes just cause. The sales expectations are clear and unambiguous route sales representatives are expected to make a reasonable sales effort, and if they do not, they may be subject to discipline. The expectation that the RSR's sell to existing and new customers has been in existence for many years; these clear standards have been communicated not only on sales average, but also on retention and other measures of performance. The parties have specifically recognized that just cause exists to discipline an RSR whose sales work is unsatisfactory against the set standard.
Given the clear and unambiguous language, there is no need to consider practice. Further, given the few occasions of discipline since the new agreement, a contrary practice has not been established. The elimination of the prior letter of understanding regarding discipline for sales-related work does not establish a practice. The suggestion that the prior general manager was considering additional steps in a progressive discipline model, with no indication he ever followed through, does not establish a practice. Even if a progression of several steps were established, this would not survive the plain reading of the agreement nor the arrival of the new general manager. Finally, the arbitrator is limited in defining appropriate discipline, since to impose a progression of discipline would effectively amend the collective bargaining agreement, which the agreement explicitly says the arbitrator cannot do.
The grievant failed to meet long-standing expectations and the terms of his disciplinary notice, and the employer was within its rights to discharge him. When the company required the grievant to meet a higher standard, it did so as an effort to boost him to a point near an acceptable performance level. The grievant knew and understood the expectations. If the union objected to the form of discipline in the PIP or its content, it had an obligation to grieve at that time. Because the grievant and the union failed to grieve the PIP at the time it was imposed, and because neither chose to identify the PIP in the grievance, the arbitrator should not consider whether the PIP could be presented and enforced.
That the grievant failed to meet expectations does not appear to be in dispute, and his performance levels speak for themselves. The grievant did not appear to even try to reach expectations.
The discipline does not failed for lack of notice. Steward O'Malley has the authority to file grievances, so that notice to him was sufficient.
The company complied with the clear language of the collective bargaining agreement in defining performance failures and disciplining the grievant. The grievant was properly discharged following a full opportunity to improve.
On September 6, 2002, company managers issued a Performance Improvement Plan to Route Sales Representative Tim Stelse which required Stelse to perform at twice the standard to which all other company RSR's were held. When Stelse failed to reach those levels within a few weeks, the company determined to terminate him, and did so on October 14. The union grieves, claiming the discharge was without just cause, as required under the parties' collective bargaining agreement.
Just cause for performance-related discipline requires that the employee knew the job performance required, that the requirements were reasonable, that the employee knew the penalties for failure, that the employer provide appropriate training and resources for the employee succeed and that the employee failed to perform adequately.
The union raises four reasons why it believes the discharge was without just cause and thus must be overturned. It asserts the discharge was procedurally defective due to the lack of notice to the union; that the PIP did not constitute a proper written warning; that the PIP imposed unreasonable expectations, and that the company violated past practice when it failed to follow progressive discipline and discharged Stelse for failing to meet certain activity levels.
There should be little question that the company has the right to set reasonable performance standards. Indeed, since the just cause provision, section 12.2, explicitly enumerates "inefficiency" and "unsatisfactory route and sales work" as bases for discipline, it is appropriate, even necessary, for those terms to be well-defined. That is what the company has done by establishing and publicizing the general performance standards. Moreover, under section 19.1, route representatives are required to "make a consistent and reasonable effort" towards soliciting new accounts and retaining existing accounts, so that "(i)n the absence of a consistent and reasonable effort corrective action may be taken." Again, by quantifying what a "consistent and reasonable effort" means, the company has appropriately sought to dispel any
confusion or ambiguity about what its expectations were. I leave to later the question of whether those standards were reasonable.
As one of the questions is whether the grievant did indeed fail to perform adequately, I begin my analysis by attempting to put Stelse's work record in context. The company has provided a wealth of data, which I formatted above to highlight the record following issuance of the PIP.
Perhaps the most critical single column is that noting sales data, where the company has set a unit-wide minimum of $10 weekly while requiring $11 from Stelse. There are 25 other RSR's in Market Center 614 whose performance the company monitored on route check-in audits. In the four weeks between issuance of the PIP and October 4 6/, Stelse sold $31.40, a weekly average of $7.85 and thus below both the standard minimum and his own higher requirements from the PIP. That same period, the weekly average per RSR for the market center as a whole was $13.48, and thus well above both the standard minimum and Stelse's PIP.
6/ The Company did not offer into evidence the route check-in for the week ending October 11.
However, when Stelse's weekly sales are measured individually against the 25 other RSR's, we find there were 34 instances of another RSR selling more than Stelse, 56 instances in which Stelse sold more than another RSR, and ten instances in which Stelse and another RSR sold the same. Ultimately, though, while these isolation snapshots are interesting, they do not ultimately carry the weight of the unit-wide data showing Stelse failed to satisfy the company's reasonable expectation of a $10 weekly average in sales.
As to the other categories, the data shows Stelse to have been exceptional in sales calls, a complete failure in the issuance of written proposals, and generally mediocre in the remaining three categories. Thus, the record as a whole somewhat supports the company's suspicions that Stelse was taking credit for sales calls he didn't make, and its conclusion that he was not performing to its expectations.
Whichever comparisons are used either with the "sales calls" data or without -- Stelse's performance as measured by the route audit check-ins is mediocre at best, but is obviously not the worst.
Next I consider the data concerning loss and ruin, where the company set a 12.5% minimum in Stelse's PIP. Although Stelse's year-to-date percentage of 11.8 as of October 11 was below the standard the company set, his numbers were still higher than Hamilton's district-wide percentage (11.5) or the 11.2% logged by the combination of Market Centers 614 and 624. Further, in the five weeks between issuance of the PIP and Stelse's termination, there were 54 instances of another RSR having a higher Loss and Ruin Year-to-Date percentage than Stelse, and 111 instances in which Stelse's percentage was higher. 7/
7/ The Company did provide the full five weeks' of data on loss and ruin experience.
Finally, the PIP addressed the issue of contract renewals, where Stelse had the second-highest percentage of expired contracts in both the third and fourth quarter. However, Stelse did show comparative improvement, going from a -9.5 deviation (his third-quarter non-renewal percentage of 31.5 compared to the district-wide average of 22) to a deviation of less than -4.8 (his fourth-quarter percentage of 25.8 compared to the district-wide average of 21).
The relevant data, therefore, describes a situation where an employee is certainly under-performing, on a wide range of tasks. While Stelse showed more improvement than the company seems to have acknowledged, both comparatively and measured only against himself, his numbers do provide a basis for concern on the part of the company. And the company has a legitimate, even compelling interest in the performance of the RSR's, whose activities are essential to its success. For the company to prosper, the RSR's must retain and recruit business; as noted, this duty is reflected in the requirement in the collective bargaining agreement that each RSR make a "consistent and reasonable effort" towards the responsibility to "solicit new accounts and retain existing accounts." Thus, contrary to the union's analysis of the bargaining history, the company has the right to evaluate and discipline an RSR not just for sales, but for sales activities as well.
The question I turn to now is whether those numbers, in light of the rest of the record, provided just cause for the company to fire Stelse. As noted above, the union argues just cause is lacking, both procedurally and substantively.
The company has an obligation under Article 12.2 to provide notice of certain disciplinary matters to the union. Specifically, the paragraph provides that "(a)t least one (1) warning notice shall be given in writing to the Union and to the employee before discharge or suspension can be made," except in extraordinary circumstances which the company doesn't claim relevant. The section further provides that "(w)ritten notice of discharge or suspension setting forth cause shall be given to the employee of with a copy to the Union." (emphasis added) The company does not deny these duties, and acknowledges it did not provide notice of
the PIP to union local business representative Schultz, who testified further that he has never received correspondence "setting forth cause," and only received the barest of notice at the initial grievance meeting October 29. The company, which did not rebut Schultz' testimony, contends that its presentation of the PIP to steward O'Malley at the September 6 meeting satisfied all procedural requirements under the agreement.
There are several elements of evidence supporting the union's claim that the right to notice is held by the union local business representative and not the steward.
In interpreting what "the Union" means in Article 12.1, it is instructive to consider how the parties have used that term elsewhere in their collective bargaining agreement. At the outset, of course, it is Teamster Union Local No. 695 which is party to the agreement, not just the bargaining unit. This is made explicit in the Articles of Agreement preamble, which identifies "the Union" as that entity housed at 1314 North Stoughton Road. The plain reading of that provision is that further references to "the Union" are to that office and its personnel, not the Aramark bargaining units. Two further provisions, articles 7.1 and 10 reinforce this understanding by explicitly identifying officers from the Stoughton Road office as having enumerated responsibilities, authority, and privileges.
The union also offered documentary evidence of disciplinary notices being provided to the local 695 office, as well as corroborating testimony from business representative Schultz that the standard practice was to provide disciplinary notices to him, not just the steward. And Schultz of course, was far more qualified to testify as to the administration of Article 12 than were the company witnesses, neither of whom either experienced or investigated what practices there were. When Schultz swore that the contract provides for him to receive copies of discipline, the company could offer no testimony to the contrary.
Finally, my general understanding of contract administration leads me to conclude that notice is due on Stoughton Road, not just to the steward.
There is a mutuality of the relationship between the member and the union, arising out of the Article 3 requirement that employees working under this agreement remain union members in good standing as a condition of their employment. In exchange for that burden of mandatory membership, the employees/members receive the benefits of the collective bargaining agreement. These benefits are not limited to wages and economic matters, but also include contract administration and representation on grievances. This benefit is especially important on matters as serious as a pre-termination written warning or a discharge notice. The underlying principle is that the contract provides for warning notices to be given in writing to the business representative not for the sake of the union, but for the sake of the member/employee; it is the member, remember, whose rights the contract protects.
The mutuality of the relationship between member and union is indicated by two further contractual provisions which support the union's argument. Section 17.1 sets a ten-day limit on the filing of grievances; section 12.3 requires both the employee to file a written protest with the union within five days of discharge or suspension, and for the parties to then meet and discuss the merits of the matter. Given these deadlines, and what is at stake, for the union to meet its obligations of full representation, it must know in a timely manner of warning notices and discharges.
Another critical element of 12.2 is its guarantee for both the employee and union of a "written notice setting forth cause" for discharge or suspension. (emphasis added). As arbitrators routinely hold employers to what they knew and what they said at the time of discipline, this contemporaneous statement is of extreme importance for all that is to follow if the employee or union wishes to challenge the discipline. The employer's failure to comply with this term denies the employee and union the ability to understand and analyze the discipline.
There is nothing in the record to indicate that O'Malley is anything other than a qualified and dedicated steward. But he is essentially a volunteer, as well as a co-worker, and the company effectively made him Stelse's only representative at this critical point in his working life. By denying notice of the warning to Schultz, the company also denied the right to professional representation to Stelse. It is simply not good enough to say, as the company does, that O'Malley's experience in the work-force and as a steward meant that notice solely to him was sufficient. 8/ Nor can the company claim that because the union was able to file a grievance on the termination even though it also failed to provide local 695 with notice of that action as well, experience proves this level of notice to be sufficient. It isn't.
8/ The Company also appears to overstate O'Malley's experience as a steward, implying on page 17 of its brief that he had served in that capacity for over 14 years. While O'Malley has been with the Company for that length of time, he has served as a steward for less than half that period.
Indeed, the need for notice to be given to local 695 is especially acute given the unique nature of the PIP. As noted, because Ross wanted to be more comprehensive, the PIP was not issued on the standard disciplinary notice form. A steward such as O'Malley, used to that form as the pre-termination written warning, could easily have failed to grasp the PIP's use in that way as well.
Thus, the text of the collective bargaining agreement, the testimony of a credible witness, and a sense of the purpose of the provision support a finding that references to "the Union" are to the corporate offices on Stoughton Road. Since Article 12.2 requires that "(a)t
least one written notice shall be given in writing to the Union before discharge or suspension." 9/, and the company relies on the September 6 PIP as the warning notice that enabled the October termination if the PIP is popped due to lack of proper notice to the union the discharge could not stand. Similarly, given the further notice requirements of 12.2, directing that "(w)ritten notice of discharge or suspension setting forth cause shall be given to the employee with a copy to the Union," it would be difficult to sustain a discharge it its written notice were not provided to local 695 until after the time limit for filing grievances, and if the union never received an explanation as to cause for termination.
9/ Except in extraordinary circumstances, which the Company doesn't claim.
The union also asserts that even if the PIP had been noticed properly, it would still not satisfy the 12.1 requirement because it was not a proper warning notice as the parties understood the term. Hamilton testified that at the September 6 meeting, "I paraphrased by saying, 'This is a formal written notice and this is very serious,' and just kind of reiterated that last sentance." Stelse and O'Malley remember otherwise, and recall Hamilton referring to the PIP as an instructive tool, more guideline than warning. 10/
10/ The fourth and final witness to the meeting, another district manager, did not testify at hearing.
Because of the documentary evidence, it is unnecessary for me to consider further questions of credibility on this point. Again, the union appears to have better exhibits - the disciplinary notices from 2000-2001, which explicitly use the word "warning" six times, the word "disciplinary" thrice and "termination" twice. This document clearly satisfies the contractual requirement for a written warning notice before discharge or suspension. Having received such a document on Sept. 18, 2001 - a verbal warning for low sales Stelse would clearly understand its meaning in light of article 12.2, as would O'Malley, who received a written record of a verbal warning relating to loss and ruin in April, 2000.
In contrast, while the PIP does "advise" about "further corrective action" and raise the specter of "immediate action up to and including termination," it nowhere declares itself to be a written warning notice. The PIP refers to objectives, requirements, improvement, but without using the word "warning," it's hard to see how it is one.
I do not discredit Ross's testimony that he thought he was being helpful and comprehensive in issuing the PIP rather than the standard disciplinary notice. But for the PIP to be clearly understand by Stelse as it was understood by the company a pre-termination
written warning it should have been on the proper form for a disciplinary notice. The fact that Schultz sometimes files a grievance by correspondence rather than a standard document does not establish such a degree of form informality as to excuse the company's conduct.
Nor was the company's claim of the PIP as the written warning notice enhanced by its somewhat casual presentation of the document. The Summary of Expectations paragraph - the paragraph with the only references to discipline in the entire PIP includes two instances where the supervisor is to circle a time-frame option (requirements being assessed daily, weekly, monthly; measurable improvement being made within 30, 60, 90 days). Neither Ross nor Hamilton circled a specific deadline in either instance. While they may well have believed that the single entry "Timeline: For the next 30 days" on attachment "A" obviated the need for any further indication, this failure to take this easy opportunity to reinforce the disciplinary nature of the document and the urgency of the situation does not help the company's case that Stelse should have understood the PIP as a 12.2 written warning notice.
If not all employees and union officials, used to the standard Disciplinary Notice form, would readily understand this PIP as constituting a 12.2 written warning notice, it would not be one. And absent a proper written warning notice, the further discipline could not stand.
Nor could the discipline stand if the performance standard itself was unreasonable. The company can punish Stelse for failing to meet its expectations only if those expectations are appropriate.
The Madison Market Center General Manager, Michael Ross, testified on direct examination that he considered the standard level of activity, as reflected in the "minimums" noted in the route check-in statistics to be reasonable, in the context of the contractual requirement for RSR's to exert a "reasonable effort" towards soliciting and retaining accounts:
Q: And how did you interpret the term, "reasonable"? Or I should say the phrase, "reasonable effort"?
A: "Reasonable," for Market Center 614 Madison I defined as the activity that we requested and was known as the standard in Market Center 614 Madison. There are there are set activity levels that are to be accomplished each and every week by each and every RSR. My definition was not an interpretation. It was just a - a realization that that's what the standard was for defining "reasonable."
As noted above, the PIP which Hamilton presented to Stelse on September 6 contained a series of performance standards essentially twice those of other RSR's. The following excerpts of the union's cross-examination of Hamilton convey this point clearly:
Q: So you were requiring essentially double of him than what the Company requires overall from people?
Q: Was there anyone else in the Company that was required to meet double the standard?
A: No. Not that I know of anyways.
. . .
Q: Okay. If I understand this correctly, after giving him this form (the PIP) he basically had thirty days, correct?
Q: And during that time the standards that you set were above the minimum standards that the Company requires for all employees, correct?
Q: So you are assessing him and determining whether or not he's going to maintain his job and you are raising the level he has to meet above everyone else. Do you think that's fair?
A: In this case I do. Yes, I do.
Q: In other words you took a guy who was below the standard and told him, "the only way you can keep you job if you, in the next thirty days, exceed the standard, in most cases double," that's what you did?
That is, the PIP which the company relied upon as a pre-termination warning doubled the performance standard that the company general manager considered to be reasonable. By definition, that makes this PIP unreasonable. Failure to satisfy an unreasonable performance standard does not constitute just cause for immediate discharge.
Stelse's consistently mediocre performance justified some level of discipline; even absent the improperly inflated standards of the PIP, he still failed to meet most of the company's legitimate expectations. The company may impose discipline up to termination for precisely this level of performance. But before it may do so, it must satisfy the other terms of just cause that Stelse could reasonably have been expected to understood both the requirements and the penalty for failure, and that all significant procedural elements were satisfied.
As noted above, the parties' 1995-1999 collective bargaining agreement contained a Memorandum of Understanding regarding the company's right to establish sales quotas, and its right to impose progressive discipline for an RSR's failure to meet quota. During the collective bargaining for a successor agreement, the union proposed to delete the memorandum. On June 9, 1999, the parties tentatively agreed to the company's counter-proposal, by which the memorandum would be deleted and Article 19 would be revised to read as noted above. Subsequently, however, the company continued to practice progressive discipline, as reflected by its continuing use of the Disciplinary Notice form and the messages (presumably related to route representatives) contained in the Fish correspondence. Because the company unilaterally and without notice sought to abrogate its practice of progressive discipline Stelse could not reasonably have been expected to understand the consequences for his failure to the company's expectations.
Therefore, on the basis of the collective bargaining agreement, the record evidence and the arguments of the parties, I find that the company's failure to provide notice of the Performance Improvement Plan (PIP) and a written explanation of the discharge to the union local business representative, the reliance on the PIP as a written warning notice, and the imposition upon Stelse of performance requirements twice those expected of all other RSR's, all constituted violations of article 12.2 of the agreement. Accordingly, it is my
That the discharge of Tim Stelse was without just cause, and the grievance is sustained. The company shall reinstate Stelse and make him whole for lost wages and benefits.
Dated at Madison, Wisconsin, this 30th day of June, 2003.
Stuart Levitan, Arbitrator