It used to be that criminal charges and most certainly a criminal conviction, always led to termination from employment, especially in the public sector. This was at least in part due to a recognized sensitivity that taxpayers had a right to expect more from public employees. The trend is changing, evidenced by arbitration decisions awarding lesser discipline to employees charged, and even convicted of crimes.

Just last week a Minnesota corrections officer working at a state facility was reinstated by an arbitrator, after pleading guilty to felony terroristic threats. In a drunken off-duty incident, the corrections officer threatened to “blow off his girlfriend’s head along with her daughter.” He had 16 guns at his house, but did not make the threat with gun in hand. He was terminated for violating a Department of Corrections policy governing conduct of employees.

At the hearing, the employer argued the corrections officer was prohibited from carrying a weapon, which was sometimes required while he worked in Master Control. The employer also asserted it was untenable for an individual under criminal supervision himself, to have authority over inmates who also were under criminal supervision.

The arbitrator placed great weight on the fact the corrections officer had a spotless 20 year work record, and immediately after the incident, he checked into treatment for alcoholism, and followed all the recommendations included in his treatment plan. Even acknowledging the corrections officer was prohibited from carrying a firearm under the Supreme Court’s decision in U.S. v. Hayes, 129 S.Ct. 1079 (2009), the arbitrator reinstated the employee without backpay, to a job not requiring him to carry a firearm.

Acknowledging the case was a close call, the arbitrator found compelling the fact the employer had other employees working and supervising inmates who had DUI’s on their record. While the corrections officer pled guilty to a felony, he was sentenced as if he had committed a gross misdemeanor, the same level crime as other working employees. Coupled with the undiagnosed alcohol addiction, termination was deemed to have been too severe.

Off-duty conduct by an employee can result in discipline if there is a material, adverse nexus to the employer’s business. If the conduct is also criminal in nature, it is not guaranteed it will be found by an arbitrator to support termination of the employee. Careful review of all of the factors surrounding the employees work record, previous discipline practices in the workplace, and any mitigating facts should also be considered in deciding the appropriate level of discipline.

When employees blur the line between their private life and professional life, it can be problematic for employers. In two recent Minnesota arbitration decisions, the issue of romantic relationships was central to employment consequences for two police officers. Both cases were heard by neutral arbitrators, and the actions taken by the employer were affirmed.

Fraternization: A romantic relationship which developed between a City of Champlin Police Sergeant and a patrol officer, eventually lead to the Sergeant’s demotion. The romantic relationship developed over a period of time, which led the City to give the Sergeant the option to resign his supervisory position or end the relationship. The Sergeant declined either option. The City subsequently adopted a formal Fraternization Policy. As a result of the new policy, the Sergeant was involuntarily demoted.

At arbitration, the Employer successfully argued the romantic relationship could lead to “…lawsuits, claims of preferential treatment, morale problems and safety problems in the department.” The Union claimed the Employer was prohibited from retroactively applying the Fraternization Policy. The arbitrator dismissed the Union’s argument stating, “All new policies have to have a starting point and the Fraternization Policy was enacted for safety, liability, and morale concerns, which are justifiable reasons for ‘retroactively’ applying the Policy to the Grievant’s romantic relationship, which caused the Policy to be promulgated in the first place.” As a result of the arbitrator’s decision, the Sergeant exchanged his supervisory stripes for romance.

Love Gone Bad: In another arbitration decision, a patrol officer for the City of Prior Lake was terminated from employment for his actions surrounding a failed romantic relationship. The officer had recently broken up with his fiancée, when he returned to her residence in uniform and on-duty. He used a key he still had to let himself in the house, and then broke down a bedroom door where his former fiancée was hiding with another man. The officer left the residence, and offered to pay for the broken door. He was convicted of two misdemeanors and terminated from employment. The arbitrator noted the conduct of the officer “…undercuts the mission and trust in a police department when an officer on duty violates the law and shows bad judgment resulting in abuse of authority and a failure to exercise discretion.”

Generally, when romance and work collide, the case concerns off-duty conduct. These two arbitration cases clearly indicate romance at work, or romance which leads to conduct during work, can have significant employment consequences. Employers clearly have a right and an obligation to consider the impact of romances on workplaces.

The beauty of arbitration decisions is that they provide a blueprint on what went right and what went wrong in discipline decision-making. Employers should carefully review arbitration awards, taking note of the arbitrator’s rationale to avoid making the same costly mistakes in the future.

The Minnesota Department of Natural Resources (DNR) terminated an employee, which was later overturned by an arbitrator. (Hamm v State of Minnesota) The employee was reinstated and then she filed a discrimination claim, which was recently settled when the State agreed to pay her $250,000.00.

DNR officer Cathy Hamm, had been terminated for her participation in preparing for the 2007 National DNR Conference held in Minnesota. 150 employees worked on the conference, but only Hamm was disciplined. The state alleged she had:

  1. Failed to establish a time track code for work she completed on the conference, (The arbitrator ruled this was above her pay grade. Her supervisors were discussing how to accomplish this, but did not follow through.)
  2. Conference fees were not set appropriately; (The arbitrator ruled that higher ups were actually responsible for setting the fees, not Hamm.)
  3. She failed to report donated gifts; (The arbitrator ruled the gift policy was not applicable to the facts.)
  4. Her use of state property and time in the drafting and sending of a fund-raising letter for the event was inappropriate. (The facts indicated the Commissioner of the DNR had approved the fund-raising letter via email and received copies of it as well.)

In conclusion, the arbitrator found the charges of misconduct alleged by the employer could not be supported by the results of the investigation.

So what went wrong? When we conduct investigations at our firm we make a practice of reviewing an investigation microscopically and then telescopically; up close and then stand back and take a fresh look. A fresh pair of eyes would have also been a great idea in the Hamm case, to review the investigation before making a disciplinary decision. Fresh eyes might have seen that the alleged policy violation did not actually fit the facts of alleged misconduct. Fresh eyes would have made sure the employee actually was given the job responsibilities, and not some supervisor above the employee, before alleging such misconduct. Fresh eyes would have confirmed the head of the department had actually approved a fund-raising letter, before finding misconduct on the part of an employee for sending it. Fresh eyes might have questioned why only 1 out of 150 employees was under investigation for misconduct. 

Employers should make it a habit to routinely read discipline arbitration decisions to avoid making costly mistakes.  The Minnesota Bureau of Mediation Services is a good place to start your reading…….



Class action grievances permit a group of individuals who are similarly situated to arbitrate claims together under one umbrella case. Previously, if a labor contract or arbitration agreement was silent on class action grievances, they were generally allowed by most arbitrators. However, according to the U.S. Supreme Court that is no longer the case.

In April, the U.S. Supreme Court ruled “[A] party may not be compelled under the FAA (Federal Arbitration Act) to submit to class arbitration unless there is a contractual basis for concluding that the party agreed to do so.” Stolt-Nielsen v. Animal Feeds Intl’ Corp. This means unless an arbitration agreement specifically permits class action arbitrations, none will be allowed.

But wait, in May the Minnesota legislature passed legislation overhauling the Minnesota Uniform Arbitration Act. In the overhaul there is a provision for consolidating separate arbitration proceedings if some or all of the claims are between the same parties, the claims arise in substantial part from the same transaction or series of related transactions, there is a common issue of law which creates the possibility of conflicting decisions, and the prejudice for failing to consolidate claims is not outweighed by the risk of delay or prejudice to the party opposing consolidation. In essence, the law provides a vehicle to combine grievances, much like a class action grievance.

What the U.S. Supreme Court had put asunder, the Minnesota legislature now has put together….

The United States Supreme Court has agreed to hear a case regarding the arbitrability of race discrimination and retaliatory termination claims made by an employee who has alleged the arbitration agreement with his employer was unconscionable.

Gavin Craig, Minnesota attorney and publisher of Twin Cities Business Litigation Blog, warns about courts rewriting contracts.

“This is an odd case. If you accept the premise that the arbitration Agreement is a contract, and that the parties are bound by their contracts, the Ninth Circuit is wrong. The court is essentially re-writing the contract and deleting a provision. That is not right. Courts are not supposed to rewrite contracts. But that is the effect of the Ninth Circuit ruling. (pdf)"

The United States Supreme Court will now be deciding if a district court is required to determine the unconscionability of an arbitration agreement, even when the parties to the agreement have clearly and unmistakenly assigned this “gateway” issue to the arbitrator for decision?

The U.S. Supreme Court’s decision may have a far reaching impact on arbitration agreements between employers and employees, but for now we will have to wait and see.