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Christus St. Vincent Regional Medical Center v. District 1199NM, National Union of Hospital and Healthcare Employees, AFSCME, AFL-CIO

United States District Court, D. New Mexico

March 30, 2018


          Hari-Amrit Khalsa Hinkle Shanor LLP Albuquerque, New Mexico --and-- Ellen S. Casey Jaclyn M. McLean Hinkle Shanor LLP Santa Fe, New Mexico --and-- Charles Birenbaum Jamie Adams Greenberg Traurig San Francisco, California Attorneys for the Plaintiff.

          James A. Montalbano Stephen Curtice Shane C. Youtz Youtz & Valdez, PC Albuquerque, New Mexico, Attorneys for the Defendant


         THIS MATTER comes before the Court on: (i) the Plaintiff Christus St. Vincent Regional Medical Center's Petition to Vacate Arbitration Award, filed April 13, 2017 (Doc. 1) (“Petition”); and (ii) the Defendant's Motion to Enforce Arbitration Award, filed April 27, 2017 (Doc. 9)(“Motion”). The Court held a hearing on January 19, 2018. The primary issues are: (i) whether the arbitration provisions in the Nurse Agreement between Christus St. Vincent Regional Medical Center & District 1199 NM National Union of Hospital and Healthcare Employees AFSCME, AFL-CIO, October 15, 2014 to August 31, 2017 (Doc. 1-3) (“CBA”) -- which state that an arbitration award may be set aside under certain conditions -- change the standard of review for arbitration awards, which the Supreme Court of the United States articulated in the Steelworkers Trilogy[1]; (ii) whether the arbitrator, Michael S. Hill, [2] exceeded his authority by ordering a fired employee reinstated; (iii) whether the arbitration award violates public policy by not disciplining an employee who allegedly violated the Health Insurance Portability and Accountability Act of 1996, Pub. L. 104-191, 110 Stat. 1936 (“HIPAA”); and (iv) whether Plaintiff Christus St. Vincent Regional Medical Center's (“St. Vincent”) claims were frivolous and brought in bad faith such that the Court should award attorneys' fees and costs. The Court concludes: (i) the CBA does not change the Court's standard of review, because the CBA's arbitration provisions restate traditional standard of review principles; (ii) the arbitrator did not exceed his authority, because the award draws from the CBA's essence; (iii) the award does not violate public policy, because there is no evidence that the employee violated HIPAA; and (iv) the Court will not award fees or costs, because St. Vincent did not pursue frivolous arguments or act in bad faith. Accordingly, the Court denies the Petition, and grants the Motion in part and denies it in part.


         St. Vincent is a hospital in Santa Fe, New Mexico. See Petition ¶ 1, at 1. Defendant District 1199NM, National Union of Hospital and Healthcare Employees, AFSCME, AFL-CIO (“Hospital Union”) is a labor union based in Santa Fe. See Petition ¶ 2, at 1. St. Vincent and the Hospital Union entered into the CBA. See CBA at 1. The CBA states that St. Vincent has the “exclusive discretion” to execute certain actions, including “[d]ecisions concerning the hiring, termination, assignment, transfer, demotion and promotion of associates, ” CBA § 7.1.12, at 7-8, and “[d]ecisions concerning the counseling, reprimanding, discipline and discharge of associates for just cause with the specific understanding that any discipline must be for just cause and that the Union may grieve and arbitrate any such decisions, ” CBA § 7.1.16., at 8. The CBA establishes a progressive disciplinary process:

The four (4) basic steps listed below will be followed for disciplinary action. These steps will generally be taken in the order listed, although some steps may be omitted when serious offences have been committed.
(1) Documented Verbal Counseling
(2) Written Warning
(3) Final Warning or Suspension
(4) Termination

CBA § 12.12.10., at 15.

         The CBA has several provisions relating to arbitration:

30.19.5. The Arbitrator shall have the authority to determine if there was just cause for any disciplinary action. However, in no case shall the Arbitrator have the power to add to, nor subtract from, or modify this Agreement nor shall the Arbitrator substitute their [sic] discretion for that of the employer where such discretion has been retained by the employer, nor shall the Arbitrator exercise any responsibility or function of the employer, including but not limited to, the ability to set standards of patient care.
30.19.6. The Arbitrator's award in disciplinary cases is limited to back pay and/or reinstatement, or reinstatement to a similar position at the parties' discretion if irreconcilable conflicts exist. . . . The arbitrator may not award attorney's fees, punitive damages, general compensatory damages, or costs.
30.19.7. The arbitrator's award may be set aside when the arbitrator: Exceeded his/her authority in making the award. Exceeded his/her jurisdiction under the terms of this Agreement or, The award is contrary to law.

CBA §§ 30.19.5 -.7, at 20.

         Sharon Argenbright is a Registered Nurse who worked at St. Vincent for over twenty years. See Response to Petitioner's Motion to Vacate Arbitration Award at 1, filed April 27, 2017 (Doc. 8)(“Petition Response”). Argenbright was an active union member. See Petition ¶ 7, at 7 (stating that Argenbright was a “Union Delegate”). On May 16, 2015, Argenbright took a break from her work shift to enter the Post Anesthesia Care Unit (“PACU”) area of Surgical Services and look through PACU's log books. Corrective Action Form at 1 (dated May 28, 2015) at 1, filed April 13, 2017 (Doc. 1-6)(“Final Warning”). Argenbright was searching for patient information relating to a grievance the Hospital Union filed on behalf of a recently terminated nurse. See Final Warning at 1; Petition ¶ 17, at 6. St. Vincent investigated the incident and determined that Argenbright's unauthorized entry into a secured area during her work shift to access confidential patient records on the Hospital Union's behalf is “so egregious that it warrants skipping steps in the progressive disciplinary process and issuing this corrective action as a Final Warning.” Final Warning at 2. The Final Warning directs Argenbright to refrain from certain actions, such as “using her ID security badge to enter unauthorized or secure areas unless she is assigned to work in that area, ” “conducing non-work related business during working hours, ” and “looking at protected health information unless she has a need to know.” Final Warning at 2-3. The Final Warning concludes by stating: “Consequences of further infractions: Failure to immediately and continually adhere to the corrective measure described above may result in further corrective action up to and including termination for similar or any other hospital policy violation.” Final Warning at 3.

         In early 2016, according to St. Vincent, Argenbright “was involved in a series of incidents that taken separately each warrant discipline, and taken together, warrant termination.” Corrective Action Form (dated February 18, 2016) at 1, filed April 13, 2017 (Doc. 1-7) (“Termination Form”). First, according to St. Vincent, during a shift on January 11, 2016, Argenbright “direct[ed] patient care providers to the Clinical Supervisor at a rate that seemed unnecessary.” Termination Form at 1. Second, according to St. Vincent, during an investigative meeting relating to Argenbright's January 11, 2016, shift, Argenbright “revealed that she was in possession of documents containing private healthcare information.” Termination Form at 1. When “management attempted to investigate the nature of the documents, Ms. Argenbright refused to cooperate.” Termination Form at 1. Third, according to St. Vincent, on January 18, 2016, Argenbright “failed to gain the confidence of [a] patient, . . . fail[ed] to communicate properly about a perceived lack of responsiveness to the patient's pain, was unaware of care requirements for oxygen, and failed to reassign the patient formally to another nurse.” Termination Form at 3. Fourth, on February 2, 2016, Argenbright entered the Surgical Services' break room to eat lunch, and leave a Union card and labor contract for an employee named Kathleen Cass. See Termination Form at 3; Petition ¶ 27, at 9. According to St. Vincent, she had tried to enter the Surgical Services area by swiping her badge, but when that approach did not work, another employee let her in a different door. See Termination Form at 3. According to St. Vincent, after lunch, Argenbright returned to her usual workplace in the hospital and realized that she may have left her “report sheet” in the Surgical Services area; she returned to Surgical Services and was once again let into the area by another employee. See Termination Form at 3. According to St. Vincent, during this visit, Argenbright entered a patient care area to speak with Cass. See Termination Form at 3-4. Based on these four incidents, it fired Argenbright. See Termination Form at 1.


         Argenbright requested arbitration. See Arbitrator's Decision and Award at 1 (dated January 13, 2016), filed April 13, 2017 (Doc. 1-2)(“Award”). According to Hill, the question is “whether the Grievant was discharged for just cause and if not, what is the remedy?” Award at 3. See Reply in Support of Defendant's Motion to Enforce Arbitration Award, filed June 14, 2017 (Doc. 20)(“Reply”)(stating that the question for the Arbitrator was whether grievant was disciplined for just cause, and, if not, what is the appropriate remedy).

         Hill held a hearing on October 18-19, 2017, and November 16, 2017. See Award at 1. Hill issued the Award on January 13, 2016. See Award at 1. In the Award, Hill provides a basic factual background, see Award at 3, summarizes relevant documents and the parties' positions, see Award at 3-4, and provides a lengthy summary of the evidence and testimony, see Award at 4-32. Hill's “Discussion and Decision” section runs four pages in which he briefly addresses each of the four reasons given for Argenbright's discharge. See Award at 33-37. First, Hill concludes that Argenbright's frequent requests for a supervisor's assistance were not an appropriate basis for termination. See Award at 33-34. Second, Hill states that Argenbright's “handling of the difficult patient on January 18, 2016 is not found by the Arbitrator as cause for termination.” Award at 35. Third, Hill states:

While testimony indicated reason for suspicion that Ms. Argenbright might have hospital documents in her possession, a collective bargaining agreement provision states that notes are not subject to disclosure. Therefore, no violation of the collective bargaining agreement was found in the refusal to disclose notes in the possession of Ms. Argenbright. Consequently, no evidence was provided at the hearing of a HIPAA violation by Ms. Argenbright.

         Award at 36. Fourth, Hill states:

The evidence is clear and convincing that she attempted to enter the area by using her badge which did not permit her to enter. When that failed, she entered the area either by being let in a locked door by someone or following someone who gained entry by appropriate means. . . . The Grievant had previously been instructed in 2015 not to enter the Surgical Services area unless she was assigned duties in that area or she had permission of a supervisor to be in the area. The prior instructions were part of a Corrective Action which included a suspension and a final warning.

         Award at 36-37. Hill concludes that “the bulk of the charges against [Argenbright] were unsubstantiated.” Award at 37. Hill orders Argenbright reinstated to her job after a six-month suspension and be awarded back pay. See Award at 37.

         1. The Petition.

         Three months after Hill issued the Award, St. Vincent asked the Court to vacate it. See Petition ¶ 8, at 3. St. Vincent argues that the Award does not draw its essence from the CBA, because Hill's reduced discipline order deviated from the CBA's progressive disciplinary process. See Petition at 14-17. St. Vincent asserts that Hill ignored the CBA's plain language by reducing Argenbright's punishment despite determining that there is clear and convincing evidence that she violated a Final Warning. See Petition at 17-20. St. Vincent also argues that Hill exceeds his jurisdiction and violates public policy by reversing Argenbright's termination despite finding reason for suspicion that Argenbright violated the Health Insurance Portability and Accountability Act, 29 U.S.C. § 1181 (“HIPAA”). Petition ¶¶ 10, 13-14, at 4; 13-14. See id. at 20-26.

         2. The Petition Response.

         In its Petition Response, the Hospital Union contends that St. Vincent “attempt[s] to re-litigate facts already determined and which are beyond the scope of this Court's review.” Petition Response at 5. According to the Hospital Union, the courts' standard of review of arbitration awards is so narrow that “courts may not consider the merits of an arbitration award even if it is alleged that it rests on errors of fact or misinterpretation of the contract.” Petition Response at 5 (citing Eastern Associated Coal Corp. v. Mine Workers, 531 U.S. 57, 62 (2000); United Paperworkers Int'l Union, AFL-CIO v. Misco, Inc., 484 U.S. 29, 36 (1987); Titan Tire Corp. of Bryan v. United Steelworkers of Am. Local 890L, 656 F.3d 368 (6th Cir. 2011); Int.l Bhd. Of Elec. Workers, Local Union Nos. 12, 111, 113, 969 v. Prof'l Hole Drilling, Inc., 574 F.2d 497, 503 (10th Cir. 1978); Vrable IV, Inc. v. SEIU District 1199, 784 F.Supp.2d 846 (S.D. Ohio 2011)). The Hospital Union contends that Hill appropriately applied the “seven tests of just cause” standard. Petition Response at 10-11 (citing Healthcare Services Group, 131 Lab. Arb. 975, 980 (Clark, 2013); Grief Brothers Cooperage Corp., 42 Lab. Arb. 555 (Daugherty, 1964)). Specifically, the Hospital Union notes that Hill applied the seventh test -- whether the discipline was reasonably related to the seriousness of the offense and the employee's history. See Petition Response at 11.

         The Hospital Union also contends that St. Vincent mischaracterizes Hill's decisions, noting, for instance, that Hill determined that Argenbright took certain actions that St. Vincent decided violated a Final Warning; Hill -- according to the Hospital Union -- did not determine that Argenbright violated the final warning. See Petition Reply at 13.

         Next, the Hospital Union argues that the Award does not violate public policy by not terminating Argenbright for a HIPAA violation, because, according to the Hospital Union, Hill did not find evidence that Argenbright violated HIPAA. See Petition Reply at 19.

         Finally, the Hospital Union argues that the Court should grant it attorneys' fees, because St. Vincent brought its petition in bad faith or because it was objectively unreasonable. See Petition Reply at 21-24.

         3. The Motion.

         On the same day it filed its Petition Response, the Hospital Union filed its Motion, asking the Court to enforce the Award. See Motion ¶ 1, at 1 (citing 29 U.S.C. § 185(a)). The Hospital Union also requests that its costs “be taxed against Plaintiff and that as part of these costs there be included a reasonable attorney's fee.” Motion at 2-3. The Hospital Union incorporates by reference its Petition Response. See Motion ¶ 6, at 2.

         4. The Motion Response.

         St. Vincent responds. See Christus St. Vincent Regional Medical Center's Response to Motion to Enforce Arbitration Award, filed May 22, 2017 (Doc. 14)(“Motion Response”).[3] St. Vincent begins by asserting: (i) the Hospital Union fails to state a claim upon which relief can be granted; (ii) the Court should vacate the Award pursuant the Labor Management Relations Act, 61 Stat. § 301 (codified at 29 U.S.C. § 185) (“LMRA”), because Hill “exceeded his powers” and the Award “does not draw its essence” from the parties' CBA; (iii) the Court should vacate the Award pursuant to § 301 of the LMRA, 29 U.S.C. § 185.2, and 9 U.S.C. § 12 for public policy reasons; (iv) there is no basis for awarding attorneys' fees; (v) there is no basis for injunctive relief. Motion Response ¶¶ 1-5, at 2-3.

         St. Vincent argues that the Court should vacate the Award, because Hill exceeded his powers by reducing Argenbright's discharge. See Motion Response at 4. St. Vincent contends that Hill concluded that Argenbright committed certain acts that, according to St. Vincent, constitutes just cause for dismissal under the CBA. See Motion Response at 4-5. Consequently, St. Vincent argues, Hill exceeded his jurisdiction by ignoring St. Vincent's exclusive authority, pursuant to the CBA, to discipline and discharge employees for just cause. See Motion Response at 5-6. St. Vincent also argues that Hill misunderstood the CBA's provisions on producing records, and, as a consequence, erroneously concluded that there was no evidence that Argenbright violated HIPAA. See Motion Response at 10.

         Next, St. Vincent contends that the Court should vacate the Award, because it violates public policy. See Motion Response at 11. St. Vincent argues that “[a]llowing an employee to collect and misuse patient information, refuse to cooperate in an investigation of the matter, and avoid discipline flies in the face of well-established public policy involving the privacy of protecting health information.” Motion Response at 11.

         Finally, St. Vincent argues that there is no basis for the Court to award attorneys' fees, because its Petition is reasonable and made in good faith. See Motion Response at 11-12. Moreover, St. Vincent contends, the Hospital Union does not meet pleading requirements required for sanctions under rule 11 of the Federal Rules of Civil Procedure, because a sanctions motion must be made separately and describe specific sanctionable conduct. See Motion Response at 12.

         5. The Reply.

         The Hospital Union replies. See Reply at 1. The Hospital Union disputes that Hill exceeded his powers or ignored the CBA. See Reply at 2-3. The Hospital Union contends that St. Vincent mischaracterizes some of the evidence, such as by suggesting that Argenbright entered the restricted area for non-work-related activities when she entered the area once during a lunch break and once to retrieve a document necessary to perform her job. See Reply at 3-4. The Hospital Union also contends that Hill did not overstep the CBA by ignoring the Final Warning, because the CBA provides for additional disciplinary steps. See Reply at 4-5. The Hospital Union next contends that Arbitrators “commonly amend the discipline imposed on employees.” Reply at 5 (citing United Steelworkers of Am. v. Enter. Wheel & Car Corp., 363 U.S. 593, 598 (1960); Labor Relations Div. of Const. Indus. of Massachusetts, Inc. v. Int'l Bhd. of Teamsters, Chauffeurs, Warehousemen & Helpers of Am., Local No. 379, 29 F.3d 742, 747 (1st Cir. 1994); Angelica Textile Servs., Inc. v. Local Union 170, Int'l Bhd. of Teamsters, 2013 WL 2251554, at *4 (D. Mass., May 21, 2013)(Hillman, J.)). The Hospital Union contends that the United States Court of Appeals for the Tenth Circuit permits arbitrators to adjust punishments in light of the severity of the grievant's actions. See Reply at 5 (citing Mistletoe Exp. Serv. v. Motor Expressmen's Union, 566 F.2d 692, 695 (10th Cir. 1977)(“Mistletoe”); Local No. 7 United Food & Commercial Workers Int'l Union v. King Soopers, Inc., 222 F.3d 1223, 1229 (10th Cir. 2000)(“King Soopers”).

         Finally, the Hospital Union disputes St. Vincent's contention that the Award's purported lack of specificity would be grounds for vacating the Award. See Reply at 8. The Hospital Union states: “And while the Arbitrator did not provide a detailed legal analysis of the seven tests of just cause, it is apparent from his Award that he took those factors into consideration, and his decision tracks with that rubric.” Reply at 8-9.

         6. The Hearing.

         The Court held a hearing on January 19, 2018. See Draft Hearing Transcript (taken January 19, 2018) (“Tr.”).[4] St. Vincent began by asserting that, in their CBA, the parties agreed on a standard of review that an arbitrator's award may be set aside when the arbitrator exceeds his or her authority. See Tr. at 2:18-3:3 (Birenbaum). St. Vincent contended that the CBA's specified standard of review distinguishes this case from the caselaw. See Tr. at 3:4-11 (Birenbaum). St. Vincent asserted that it skipped some steps in the CBA's four-step disciplinary process described in the CBA, because the CBA also allows steps to be skipped for serious violations, and Argenbright's offense was serious. See Tr. at 7:5-16 (Birenbaum)(citing CBA at 15). See also CBA at 19 (“These steps will generally be taken in the order listed, although some steps may be omitted when serious offences have been committed.”). Regarding the Award, St. Vincent argues that Hill rendered a decision without applying or citing the CBA's disciplinary procedure. See Tr. at 8:20-9:4 (Birenbaum). St. Vincent argued that this case is similar to Mistletoe, because St. Vincent's power to terminate employees is not ambiguous. See Tr. at 9:31-10:14 (Birenbaum). St. Vincent distinguishes this case from King Soopers, because, in that case, the terminated worker was terminated for actions that their CBA did not expressly prohibit; here, by contrast, St. Vincent argues, Argenbright violated clear CBA policy. See Tr. 11:21-12:20 (Birenbaum). The ...

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