Citgo Asphalt Refining Company v. the Paper, Allied-Industrial, Chemical

PRECEDENTIAL
UNITED STATES COURT OF
APPEALS
FOR THE THIRD CIRCUIT
Nos: 03-1503
CITGO ASPHALT REFINING
COMPANY,
Appellant
v.
THE PAPER, ALLIED-INDUSTRIAL,
CHEMICAL, AND ENERGY WORKERS
INTERNATIONAL UNION LOCAL NO.
2-991
On Appeal from the Order of the United
States District
Court for the District of New Jersey
(Civil Action No. 02-CV-00864)
District Judge: Hon. Joseph E. Irenas
Argued December 18, 2003
Before: ROTH and M cKee, Circuit
Judges,
and CUDAHY, Senior Circuit Judge*
Opinion Filed: October 14, 2004
Ronald H. DeMaria, Esquire
(ARGUED)
McElroy, Deutsch, Mulvaney, LLP
1300 Mt. Kemble Avenue
Morristown, New Jersey 07962
James J. McGovern III, Esq.
Genova, Burns & Vernoia
354 Eisenhower Parkway
Plaza II, Suite 2575
Livingston, NJ 07039
Attorneys for Appellant
Robert F. Henninger, Esquire
(ARGUED)
Warren J. Borish
Spear, Wilderman, Borish, Endy, Spear
and Runckel
36 Tanner Street, 2nd Floor
Haddonfield, New Jersey 08033
Attorneys for Appellee
OPINION
McKEE, Circuit Judge.
CITGO Asphalt Refining Company
appeals the district court’s confirmation of
a labor arbitrator’s decision that CITGO’s
zero tolerance drug abuse policy is
unreasonable. For the reasons that follow,
we will reverse.
*The Hon. Richard D. Cudahy, Senior
Circuit Judge of the United States Court of
Appeals for the Seventh Circuit, sitting by
designation.

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I. FACTS
CITGO Asphalt Refining Company
(“CARCO”) is a New Jersey partnership
involved in the oil refining industry.
C I T G O Petrole um Corporatio n
(“CITGO”), is the majority partner of
CARCO. In December 1998, CITGO
announced that it was going to implement
a new uniform national substance abuse
policy, which included a zero tolerance
policy (the “policy”), at all of its
petroleum refining facilities in the nation.
The policy was thereafter implemented at
more than sixty locations. Local 3-0673
of the Paper, Allied-Industrial, Chemical
and Energy Workers International Union
(“PACE”) challenged the policy after it
was implemented at CARCO’s asphalt
plant in Savannah, and the challenge
proceeded to arbitration. The arbitrator
ruled that the policy was proper, valid and
reasonable in all respects, and issued an
opinion and award denying the Union
grievance in its entirety. The policy was
also challenged at CARCO’s asphalt plant
in Paulsboro, New Jersey, where the
hourly workers are represented by PACE
Local 2-991. There, Local 2-991 argued
that the new zero tolerance policy changed
the existing policy as follows:
(1). . . .Under the old policy,
urine tests for drugs were
given during the annual
p h y s i c a l , w i t h t h e
individuals to be given their
p h y s i c a l e x a m s a n d
r e c e i v i n g a w r i t t e n
questionnaire a week or two
before the physical notifying
them that they were going to
be scheduled for their
physical and requiring them
t o r e s p o n d t o t h e
questionnaires. They were
given one or two days
advance notice of the annual
physical after they had
completed the questionnaire.
Other than this drug testing
as part of the annual
physical, there was not
random testing. Under the
new policy, random testing
is done immediately after
receiving notice.
(2). Under the old policy,
off-duty conduct could not
be a violation, but it is . . .
under the new policy.
(3). [Under the old policy]
[C]ause, suspic ion or
t e c h n ic a l p e r f o rm a n c e
problems or occurrence of
an accident or incident or
safety violation could
trigger a drug test as part of
the annual physical. Under
the new policy, drug testing
can be done without any of
these prerequisites.
(4). Under the old policy,
employees who tested
positive during an annual

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physical were given an
o p p o r t u n i t y f o r
rehabilitation, i.e., a second
chance. But, under the new
policy, no employee is given
a second-chance opportunity
unless they come forward
and admit their drug use
prior to any positive drug
t e s t , c a l l e d “ s e l f -
acknowledgment.”
Local 2-991's Br. at 9-10.
Local 2-991 challenged the new
policy by filing two grievances. One
alleged an “Improper implementation of a
‘new’ drug and alcohol policy.” That
grievance claimed that CARCO violated
the controlling collective bargaining
agreement (“CBA”) by not bargaining
over the new policy,1 and that the policy
violated a provision of the CBA dealing
with future bargaining. The other
grievance alleged that the “Company
implemented a drug and alcohol policy
that is totally unreasonable.”
The grievances proceeded to
arbitration after the parties agreed upon
the following submission:
Did CITGO violate Article
X X X of th e Labor
Agreement by improperly
implementing its National
Substance Abuse Policy at
the Paulsboro facility on
October 1, 1999. If not,
w a s t h e p o l i c y
unreasonable?
At the arbitration hearing, the
parties stipulated that the Management
Rights Clause (Article III) and the Future
Bargaining Clause (Article XXX) in the
then current CBA were identical to those
contained in every CBA that had been in
effect at Paulsboro since 1977. Article III,
the Management Rights Clause provides,
in applicable part, as follows:
Except to the extent
expressly abridged by an
express and sp ecific
p r o v i s i o n o f t h i s
Agreement, the Company
reserves and retains all of its
Common Law or other
rights to manage the
business as such rights
existed prior to the
execution of this or any
other previous Agreement
with the Union or any other
1 The collective bargaining relationship
between the parties began at Paulsboro in
the mid-1970s. The first labor contract at
Paulsboro was negotiated in 1997.
CITGO bought the facility in 1991 and
continued both the bargaining relationship
and the CBA. The Paulsboro facility
became a refinery in the late 1970s and is
engaged in the processing of crude oil into
asphalt and other products. There were
some 56 bargaining unit members when
the grievances were filed.

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Union. The rights of
management which are not
abridged by this Agreement,
shall include, but are not
limited to: . . . make and
enforce rules for the
maintenance of discipline
and safety, and to suspend,
discharge, or otherwise
discipline employees for
just cause. The listing of
specific rights in this
Agreement is not intended
to be nor shall it be
restrictive of or a waiver of
any of the rights of
management not listed and
specifically surrendered
herein, whether or not such
rights have been exercised
by the Company in the past.
Article XXV of the CBA, entitled:
“Grievance Procedure and Arbitration,”
provides, in relevant part, as follows:
25.1. Grievances are
defined as alleged violations
of express and specific
p r o v i s i o n s o f t h i s
Agreement occurring during
the term of this Agreement
or any renewal or extension
thereof. . . . Neither the
Union nor an employee
shall use or attempt to use
the grievance procedure as a
m e a n s o f c h a n gi n g ,
amending, modifying,
supplementing or otherwise
altering in any respect
whatsoever this Agreement
or any part thereof.
**********
25.4. The Union and the
Company both agree that
the submission to the
arbitrator shall be based on
t h e o r i g inal w ritten
grievance submitted in the
grievance procedure. . . .
**********
25.6. The power and
authority of the arbitrator
shall be strictly limited to
determining the meaning
and interpretation of the
explicit terms of this
Agreement as herein
expressly set forth. The
arbitrator shall not have
authority to add or to
subtract from or modify any
of said terms, or to limit or
impair any Common Law or
other right of the Company,
or to establish or change any
wage or rate of pay. .. . The
parties agree that the power
and jurisdiction of any

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arbitrator chosen hereunder
shall be limited to deciding
whether there has been a
violation of a provision of
this Agreement. The
a r b i t r a t o r s h a l l n ot
substitute his judgment for
that of the Company in the
absence of a clear abuse of
discretion. The arbitrator
shall not be empowered,
a n d s h a l l h a v e n o
jurisdiction, to base his
Award on any alleged
p r a c t i c e s o r o r a l
understandings which are
not incorporated in writing
in this Agreement. . . .
Article XXX, the Future Bargaining
Clause, provides:
The parties acknowledge
that, during the negotiations
which resulted in this
Agr eeme n t a n d a n y
attachments hereto, each
had the unlimited right and
opportunity to make
demands and proposals with
respect to any subject . . .
not removed from the area
of collective bargaining . .
.and therefore each waives
the right to further
bargaining on any subject
not covered or covered
under this Agreement and
any attachments hereto
during the term hereof.
The parties also stipulated that:
(1). The Paulsboro refinery
is a hazardous work
environment that can
explode and poses a
potential threat to workers,
the environment, and to the
public at large.
(2). The bargaining unit
positions affected by the
drug testing policy are
safety sensitive (as defined
i n [ D e p a r t m e n t o f
T r a n s p o r t a t i o n ]
regulations).
(3). The duties of the
bargaining unit employees
are such that their attempts
to perform while in a state
of drug impairment may
pose a threat to co-workers,
to the workplace, to the
environment, and to the
public at large.
(4). All employees
( m a n a g e m e n t a n d
bargaining unit employees
alike) at Paulsboro play a
critical role in both

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preventing accidents and
minimizing the effects of
accidents.
(5). The speed in
responding to a dangerous
condition is critical to
limiting potential damage
and injury.
In addition, Owen Haynes, a CARCO
employee for 30 years and Local 2-991
President for approximately 12 years,
testified that Paulsboro is a “potentially
dangerous work environment,” and Mike
Drager, the manager of the Paulsboro
facility, testified about “toxic and deadly”
gases at the refinery.
CITGO contends that the only
evidence Local 2-991 offered to support
its grievance that the Policy was
unreasonable was the testimony of Eric
Hamilton, the president of the PACE local
at a company called “Motiva,” and the
testimony of Timothy Koladi, the
chairman of the union grievance
committee at Sun Oil. Both men testified
that the substance abuse policies at their
respective facilities included random drug
testing. They also testified that the
Motiva and Sun Oil policies are virtually
identical to the CITGO policy except for
CITGO’s zero tolerance provision.
Hamilton testified as follows
regarding the policy at Motiva:
(1). There are 384 people in
the bargaining unit and only
two people have ever been
disciplined in two years.
(2). Motiva never requested
a zero tolerance program.
(3). Motiva’s safety record,
unlike CITGO’s, is just
“industry standard.”
(4). Motiva, like CITGO,
needed a standardized
policy, company-wide.
(5). The policy was adopted
by “consensus,” not through
negotiations.
(6). Both employees
disciplined under Motiva’s
p o l i c y w e r e “repeat
offenders.” Both violated
the policy a second time
after not being disciplined
for an initial violation, and
both were detected by
random testing.
As to the policy at Sun, Oil, Koladi
testified:
(1). There are 525

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e m p l o y e e s i n o n e
bargaining unit and 550
employees in the other.
(2). That in the ten years
since 1990, only four to six
employees have been
disciplined under the policy
and they too were all second
offenders, after having been
given a “first chance”
without discipline.
John DeLeon, CITGO’s Manager
of Human Resources and Labor Relations,
testified in defense of CITGO’s Policy and
explained the steps CITGO took in
designing its national substance abuse
policy. DeLeon testified that CITGO
reviewed the practices of other companies
in the industry and patterned much of its
policy after the Omnibus Transportation
Employee Testing Act of 1991, 49 U.S.C.
§ 31306 et seq. DeLeon also explained
that, because a uniform policy was needed,
all aspects of the program including
random testing, zero tolerance, etc. apply
to all employees, from the president of
CITGO down. He further explained that
the policy was implemented nationwide,
including all facilities where there was
union representation, and that he did not
know of a major refinery that did not have
random testing. According to DeLeon,
Tosco, Marathon and Exxon, three major
companies in the industry, also had zero
tolerance substance abuse polices.
DeLeon’s testimony was unrebutted.
During his testimony, DeLeon gave
specific reasons for a zero tolerance
provision. He testified that CITGO’s
safety record is the best in the industry, a
fact not challenged by Local 2-991, and
that CITGO wanted to maintain its record.
He explained that, in CITGO’s judgment,
offering a second chance “sends a
message to employees that it’s okay to do
drugs until you get caught. . . . [T]hat was
a very strong feeling, . . . .” DeLeon also
explained that the zero tolerance policy
does not apply if an employee comes
forward and identifies him/herself as a
person with a substance abuse problem.
He also explained that CITGO’s medical
director was on the team that designed the
program, and added that the only union in
the country that had challenged the
program was the union at the Savannah,
Georgia, asphalt plant. As noted, the
Savannah arbitration resulted in an award
which found that the CITGO Policy was
reasonable in all respects. The president
of Local 2-991 testified that the Savannah
plant is virtually identical to the Paulsboro
facility.
The arbitrator found “no
contractual breach by [CITGO] with
respect to its unilateral adoption and
implementation of a substance abuse
program in 1999.” He also found that the
mandatory, random testing procedure was
both proper and reasonable. However, he
sustained the local’s challenge to the zero
tolerance policy. The arbitrator ruled that
part of the Policy was unreasonable. He
explained:
[T]here can be no serious

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quarrel with the right of a
company in this type of
industry to make certain that
s a f ety c o n c e r n s a re
paramount and should be
adequately addressed. . . .
Indeed, it was recited that
CITGO has the best safety
record in the industry and
wants to keep it that way. I
therefore will not seek to
d i s t u r b th a t r e c o r d .
However, there are specific
areas of the Policy that are
troubling to me. . . .
While the Union argued that
mandatory random testing
s h o u l d b e d e c l a r e d
unreasonable, the Arbitrator
cannot agree with that
position. Having said that,
I do nevertheless understand
and appreciate the Union’s
argument with respect to
employees who test positive
as the result of random
testing not being given a
second chance under the
Policy. The facts reveal that
this is contrary to the
policies in place at the
Motiva refinery in Delaware
City, Delaware, and at the
Sun refinery in Marcus
Hook. While the Arbitrator
fully acknowledges that the
best safety record in the
industry is obviously a
legitimate objective for any
company, it has not been
shown to my satisfaction
that permitting an employee
to have a “second chance”
would be inconsistent with
that goal. That being so, the
Arbitrator agrees with the
Union that the Policy,
without giving a second
chance for rehabilitation, is
unreasonable to that extent
and to that extent only. This
is especially so where the
DOT regulations permit
s e c o n d c h a n c e o r
rehabilitation opportunities.
I therefore find that the
Policy should be modified
in that regard.
Thus, “[t]he arbitrator . . . sustained [the
policy] as written except where it does not
permit a (sic) employee second-chance or
rehabilitation opportunities.” App. at 473.
The arbitrator held that the policy
(including CARCO’s right to conduct
random drug testing), was reasonable,
except for the so-called “zero tolerance”
provision. . . .
II. DISTRICT COURT
PROCEEDINGS
CARCO filed a complaint in the
district court challenging the arbitration

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opinion and award.2 CARCO alleged that
the arbitrator: (1) exceeded the power and
authority given to him by the parties; (2)
rendered an award which did not draw its
essence from the labor agreement; (3)
ignored the plain language imposing
limitations on his authority; (4) rendered
an award which was not totally supported
by the record; and (5) failed to apply the
standard of review set forth in the CBA.
Local 2-991 filed an answer and
counterclaim to enforce the award in its
entirety. In time, cross-motions for
summary judgment were filed and the
district court thereafter entered an order
granting Local 2-991's motion for
confirmation of the award in its entirety.
This appeal followed. The arbitrator’s
rejection of the zero tolerance provision of
the policy is the only issue on appeal.
III. STANDARD OF REVIEW
We exercise plenary review of the
district court’s confirmation of a labor
arbitration award and apply the same
standard the district court should have
applied. Exxon Shipping Co. v. Exxon
Seaman’s Union, 73 F.3d 1287, 1291 (3d
Cir. 1996) (“Exxon III”).
Courts play a very limited role in
reviewing the decision of an arbitrator
appointed pursuant to a collective
bargaining agre em ent. Un ited
Paperworkers International Union, AFL-
CIO v. Misco, Inc., 484 U.S. 29, 36
(1987). “When the parties include an
arbitration clause in their [CBA], they
choose to have disputes concerning
constructions of the contract resolved by
an arbitrator.” W.R. Grace and Co. v.
Local Union 759, International Union of
the United Rubber, Cork, Linoleum and
Plastic Workers of America, 461 U.S. 757,
764 (1983). Consequently, we “are not
authorized to reconsider the merits of an
award even though the parties may allege
that the award rests on errors of fact or on
misinterpretation of the contract.” United
Paperworkers Union v. Misco, Inc., 484
U.S. at 36. This follows from the fact that
the arbitrator’s judgment was bargained
for by the parties. United Steelworkers of
America v. American Manufacturing Co.,
363 U.S. 564, 568 (1960). “Full-blown
judicial review of labor arbitrators’
decisions would annul the bargain of the
parties for an arbitrator’s construction of
their [CBA]” and replace it with the
court’s con struc tion. Stroehmann
Bakeries, Inc. v. Local 776, International
Brotherhood of Teamsters, 969 F.2d 1436,
1441 (3d Cir. 1992) (citing United
Steelworkers of America v. Enterprise
Wheel and Car Corp., 363 U.S. 593, 599
2The district court had subject matter
jurisdiction pursuant to Section 301(a) of
the Labor Management Relations Act, 29
U.S.C. § 185(a), which provides: “Suits
for violation of contracts between an
employer and a labor organization
representing employees in an industry
affecting commerce as defined in this
chapter, or between any such labor
organizations, may be brought in any
district court of the United States having
jurisdiction of the parties, without respect
to the amount in controversy . . . .”

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(1960)).
Therefore, we do not review an
arbitrator’s award for legal error. Exxon
III, 73 F.3d at 1295. “[A]s long as the
arbitrator’s award draws its essence from
the [CBA] and is not merely [the
arbitrator’s] own brand of industrial
justice, the award is legitimate.” Misco,
484 U.S. at 370 (citation and internal
quotations omitted). “[O]nly where there
is a manifest disregard of the agreement,
totally unsupported by the principles of
contract construction and the law of the
shop, may a reviewing court disturb the
award.” Exxon III, 73 F.3d at 1295
(citations and internal quotations omitted).
Accordingly, the award stands “even if the
court finds the basis for it to be ambiguous
or disagrees with its conclusions under the
law.” Stroehman Bakeries, Inc., v. Local
776, 969 F.2d at 1441 (citation omitted).
Therefore, a court can only vacate
an arbitrator’s award “if it is entirely
unsupported by the record or if it reflects a
manifest disregard of the agreement.”
Exxon III, 73 F.3d at 1291 (citation and
internal quotations omitted). “An
arbitrator’s decision need be neither wise
nor internally consistent.” Id. at 1297.
The decision is “subject to a standard of
only minimal rationality.” Id.
It follows that a reviewing court
must defer to the arbitrator’s factual
findings. Id. “[F]indings of fact and
inferences to be drawn therefrom are the
exclusive province of the arbitrator.” Id.
(citing Misco, 484 U.S. at 36). It is not the
court’s “role to draw inferences that the
factfinder did not.” Id.
Nevertheless, “[a]n arbitrator has
the authority to decide only the issues
actually submitted.” Matteson v. Ryder
System Inc., 99 F.3d 108, 112 (3d Cir.
1996) (citation omitted). “It is the
responsibility of the arbitrator in the first
instance to interpret the scope of the
parties’ submission, but it is within the
courts’ province to review an arbitrator’s
interpretation.” Id. at 113 (citation
omitted). Although our review of an
arbitration award is “highly deferential[,]”
id. we do not “simply . . . rubber stamp
[arbitrators’] interpretations and decisions
. . . .” Id. (citation and internal quotations
omitted).
IV. DISCUSSION
As noted above, the only issue
before us is the propriety of the arbitrator’s
determination that CITGO’s zero tolerance
policy is unreasonable. CITGO makes two
separate, yet closely related, arguments in
support of its challenge to that portion of
the arbitrator’s determination. First,
CITGO contends that the arbitrator acted
outside the scope of his authority and
rendered an award that did not draw its
essence from the CBA. Second, it
contends that the arbitrator’s determination
that the zero tolerance policy is
unreasonable is not supported by the
record. We will address each contention in
turn.
A. The arbitrator acted outside the
scope of his delegated
authority and rendered an award that

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did not draw
its essence from the collective
bargaining agreement.
The arbitrator made three separate
findings. He agreed that there can be no
“serious quarrel” with CITGO’s right to
“make certain that safety concerns are
paramount and . . . adequately addressed.”
Second, he agreed that CITGO did have
the best safety record in the industry and
“wants to keep it that way.”3 Third, he
agreed that having the best safety record in
the industry “is obviously a legitimate
o b j e c t i v e fo r a ny c om pa ny. ”
Notwithstanding this, he stated: “It has not
been shown to my satisfaction that
permitting an employee to have a ‘second
chance’ would be inconsistent with
[having the best safety record in the
industry].” He concluded his analysis
with: “[T]hat being so the arbitrator agrees
with the Union that the policy, without
giving a second chance for rehabilitation
is unreasonable.”
However, in finding that the
absence of a second chance was
unreasonable, the arbitrator ignored the
parameters of his inquiry as defined in the
CBA. As we noted above, Article XXV,
§ 25.6 of the CBA provides, in relevant
part, that “[t]he arbitrator shall not
substitute his judgment for that of the
Company in the absence of a clear abuse
of discretion.”4 The arbitrator could
therefore only conclude that the zero
tolerance policy was unreasonable if he
found that CITGO clearly abused its
discretion in instituting it. However, the
arbitrator found no abuse of discretion,
and this record supports none. The
arbitrator found that the zero tolerance
policy was unreasonable simply because
he did not believe that giving an employee
a second chance was inconsistent with
CITGO’s goal of having the best safety
record in the industry. He wrote: “[I]t has
not been shown to my satisfaction that
permitting an employee to have a ‘second
chance’ would be inconsistent with that
goal.” Thus, rather than concluding that
CITGO abused its discretion in adopting a
zero tolerance policy, the arbitrator
simply substituted his own judgment for
CITGO’s, and declared CITGO’s zero
tolerance provision unreasonable.
However, an arbitrator’s opinion
a n d a w a r d b a s e d o n “ g e n er a l
considerations of fairness and equity” as
opposed to the exact terms of the CBA,
fails to derive its essence from the CBA.
MidMichigan Reg’l Med. Ctr – Clare v.
Professional Employees Div., 183 F.3d
497, 502 (6th Cir. 1999). As we explain
more fully below, the award here
comported with the arbitrator’s view of
fairness, but did not draw its essence from
the CBA.
3 As noted, the arbitrator added that he
would therefore not “seek to disturb that
record.”
4According to CITGO, this “is a very
unusual provision to have in a labor
agreement.” CITGO’s Br. at 23.

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Local 2-991 defends the arbitrator’s
conclusion by arguing that the parties’
submission allowed the arbitrator to go
beyond the § 25.6 “abuse of discretion”
standard. We agree that, although the
CBA is the “sole source of the arbitrator’s
authority[,] . . . [t]he parties may . . . agree
to allow an arbitrator to go beyond the
express terms” of the CBA. High
Concrete Structures, Inc. v. United
Electrical, Radio and Machine Workers of
America, Local 166, 879 F.2d 1215, 1218
(3d Cir. 1989) (citation omitted). “They
may do so either by providing in the
collective bargaining agreement for
interest arbitration as well as rights
arbitration,5 or by agreeing, separately, to
submit specific issues to arbitration.” Id.
(emphasis added). A submission may be
“express, may incorporate an antecedent
grievance, or may be based on other
relevant submissions or actions.” Id. at
1219 (citations omitted). “But however
derived, the terms of the submission may
empower the arbitrator to resolve disputes
that go beyond the four corners of a
collective bargaining agreement.” Id.
(citations omitted) (emphasis added).
As recited earlier, the agreed-upon
submission read:
Did CITGO violate Article
X X X of th e Labor
Agreement by improperly
implementing its National
Substance Abuse Policy at
the Paulsboro facility on
October 1, 1999. If not,
w a s t h e p o l i c y
unreasonable?
As Local 2-991 sees it, even if the
language of the CBA prohibited the
arbitrator from substituting his own
judgment for that of CITGO’s absent an
abuse of discretion by CITGO, it is the
language of the parties’ submission that
controls the extent of the arbitrator’s
authority. Therefore, argues Local 2-991,
because the submission required that the
arbitrator determine, in the event that he
found that the policy did not violate
Article XXX (the Future Bargaining
Clause) of the CBA, whether the policy
was reasonable, the submission freed the
arbitrator from the confines of that
portion of the CBA that prohibited the
arbitrator from substituting his own
judgment for CITGO’s absent an abuse of
discretion by CITGO. More succinctly,
Local 2-991 argues that the broad
language of the last sentence of the
submission trumped the narrower
language of § 25.6 of the CBA.
5In “interest arbitration,” the parties ask
the arbitrator to set new terms and
conditions of employment, while in “rights
arbitration,” the arbitrator is asked to
r e s o lv e d i s p u t e s i n v o l v i n g t h e
interpretation or application of terms and
conditions of employment already agreed
to in the CBA. Local 801, Int’l
Brotherhood of Boilermakers, Iron
Shipbuilders, Blacksmiths, Forgers and
Helpers, ALF-CIO v. Pennsylvania
Shipbuilding Co., 835 F.2d 1045, 1046-47
(3d Cir. 1987).

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According to Local 2-991, the arbitrator
merely
reviewed the terms of the
CBA, listened to the
witn esses’ testimony,
reviewed the terms of
documents submitted, and
c o n s i d e r e d a t t o r n e y
argument. After digesting
all of this evidence, [the
arbitrator] addressed the
stipulated issue and found
that there was no contract
violation. Which brought
the arbitrator to the next
question placed before him
by the parties: whether the
policy was unreasonable.
The arbitrator answered that
question and found the
“zero tolerance” portion of
the policy unreasonable.
[Thus, according to the
u n i o n , ] [ u ] n d e r t h e
circumstances, there can be
no doubt that the award is
enforceable.
Local 2-991's Br. at 23.
However, assuming arguendo that
the submission trumped the “abuse of
discretion” standard in the CBA, it is
nevertheless still apparent that Local 2-
991 has only described what the arbitrator
did. The union has not explained either
the rationale for, or the basis of, the
arbitrator’s conclusion. 6 That failure
leads to CITGO’s second argument.
B. The arbitrator’s decision that the
zero tolerance policy
is unreasonable is not supported by
the record.
As recited earlier, “[a]n arbitrator’s
award must be enforced so long as it
draws its essence from the collective
bargaining agreement.” United Industrial
Workers v. Government of the Virgin
Islands, 987 F.2d 162, 170 (3d Cir. 1993)
(citation and internal quotations omitted).
“A labor arbitration decision fails to draw
its essence from the collective bargaining
agreement if the arbitrator acted in
manifest disregard of the law, or if the
record before the arbitrator reveals no
s u p p o r t f o r t h e a r b i t r a t o r ’ s
determination.” Id. (citation omitted)
(emphasis added). CITGO argues that,
6Local 2-991's argument seems to
establish no standard by which to judge
the propriety of the arbitrator’s decision.
Once the CBA’s “abuse of discretion”
standard is jettisoned, the union’s
argument would allow the arbitrator to
apply any free-floating standard including
his/her own subjective judgment whether
or not it was supported by the record.
This gives the arbitrator almost unfettered
discretion to determine the reasonableness
of a challenged policy. The union claims
that the last sentence of the submission did
just that.

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14
regardless of the scope of the last sentence
of the submission, the award must still be
supported by the record, and this award is
not. We agree.7
The arbitrator relied only on two
“facts” to support his determination that
the zero tolerance policy was
unreasonable. First, the arbitrator noted
that neither Motiva nor Sun Oil have zero
tolerance policies at their refineries.
However, the fact that two companies with
safety records that are inferior to CITGO’s
do not have zero tolerance policies does
not establish that CITGO acted
unreasonably in adopting a zero tolerance
policy. In fact, considering the stipulated
catastrophic repercussions of a safety
lapse at the Paulsboro plant, and CITGO’s
superior safety record, one could just as
readily conclude that it was unreasonable
for Sun Oil and Motiva not to have a zero
tolerance policy. Moreover, the
a r b i t r a t o r ’ s f i n d i n g o f t h e
unreasonableness of the zero tolerance
policy completely ignores DeLeon’s
unrebutted testimony that the three largest
companies in the industry – Exxon,
Marathon and Tosco – have zero
tolerance policies exactly like CITGO’s.
The undisputed fact that the three largest
companies in the industry have zero
tolerance policies certainly casts doubt
upon the arbitrator’s focus on Motiva and
Sun Oil, and the arbitrator never explained
why he elevated the importance of Motiva
and Sun Oil refineries over larger ones
with better safety records.
The arbitrator also relied upon
provisions of the Omnibus Transportation
Employee Testing Act of 1991, 49 U.S.C.
§ 31306 et seq., and the Department of
Transportation regulations promulgated
under it, 49 C.F.R. § 382.101 et seq. That
Act and its regulations allow employees a
second chance for rehabilitation.
However, that does not mean that a
decision to the contrary is unreasonable.
This is especially true when we consider
the hazardous nature of CITGO’s
facilities, the need for prompt and
unimpaired action in the event of an
emergency, and the exception for
employees who step forward seeking help
for a substance abuse problem that CITGO
has included in its policy.8 Indeed, the
Supreme Court has noted that the statute
and the regulations at issue leave it to the
parties to define appropriate discipline.
The Court explained the backdrop of the
safety regulations as follows:
[W]hen promulgating these
7We do not believe that the arbitrator’s
determination that the zero tolerance
policy is unreasonable is supported by the
record under CITGO’s narrow “abuse of
discretion” standard” or under Local 2-
991's broader “submission trumps the
CBA” standard.
8 We do not understand how the
arbitrator could conclude on this record
that it is unreasonable for CITGO to adopt
a policy that attempts to pressure impaired
employees into stepping forward and
seeking help before their impairment
results in a catastrophe.

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15
regulations, DOT decided
not to require employers
e i t h e r t o p r o v i d e
rehabilitation or to hold a
job open for a driver who
has tested positive, on the
basis that such decisions
s h o u l d b e l e f t t o
m a n a g e m e n t / d r i v e r
n e g o t i a t i o n . T h a t
determination reflects basic
background labor law
principles, which caution
against interference with
l a b o r - m a n a g e m e n t
a g r e e m e n t s a b o u t
appropriate emplo yee
discipline.
Eastern Associated Coal Corp. v. United
Mine Workers of America, District 17, 531
U.S. 57, 65 (2000) (citations omitted)
(emphasis added). The arbitrator’s award
here ignores that caution as well as the
express reservation of the employer’s
prerogatives as set forth in Article III, the
Management Rights Clause.
Thus, the fact that Motiva and Sun
Oil do not have zero tolerance policies and
the fact that a particular federal statute and
its implementing regulations allow a
second chance, are not sufficient to
support a finding that CITGO’s zero
tolerance policy is unreasonable. This is
especially true given the undisputed
evidence that the Paulsboro facility is a
hazardous work environment susceptible
to explosions, Local 2-991 members are
employed in safety-sensitive positions
there, and that impaired employees pose a
threat to co-workers, the work-place, the
environment and to the public at large.
Since the Managements Rights
Clause of the CBA (Article III), expressly
gives CITGO the right “to make and
enforce rules for the maintenance of
discipline and safety” and since CITGO §
25.6 of Article XXV precludes either the
union or CITGO from using the grievance
process to amend the CBA, we are hard-
pressed to understand how the arbitrator
could have concluded that the zero
tolerance policy is unreasonable without
substituting his own judgment for
CITGO’s and ignoring CITGO’s expressly
reserved right “to make . . . rules for . . .
safety.”
V. CONCLUSION
For the above reasons, we will
reverse the district court’s order enforcing
the arbitrator’s decision and award, and
remand to the district court for an order
vacating the arbitration award.

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