FEDERAL MEDIATION AND CONCILIATION SERVICE

In the Matter of the Arbitration between FMCS No. 20-00539

Grievant Gerald L. Pfaff
TEAMSTERS LOCAL UNION NO. 20,
Union,

and

AIRGAS MERCHANT GASES,

Employer.
_________________________________/

OPINION OF THE ARBITRATOR

January 29, 2020

After a Hearing Held December 10, 2019

At the Union Hall, 435 South Hawley Street, Toledo, Ohio 43609

For the Union: For the Employer:

Steven C. Steel David Gonzalez
Turley, Peppel & Christen LLC Airgas Merchant Gases
2224 Centennial Road 3223 North Elston Avenue
Toledo, OH 43617 Chicago, Illinois 60618
 The Parties and the Nature of the Case

This is an arbitration over a Union grievance between “Teamsters Local Union

20” and “Airgas Merchant Gases, LLC Toledo, Ohio”. The Employer’s facility is

located in Blissfield, Michigan. Relations between the parties are governed by the

“Agreement Between Airgas Merchant Gases and Teamsters Local Union No. 20”,

which was introduced into evidence as JX 2 and may be referred to simply as the

“Agreement”. “This Agreement shall be in effect from January 12, 2019, to and

including January 11, 2022 … .” Article 27 @ 25. Somewhat curiously, JX 2 was

signed or at least initialed on behalf of the Union and dated 9-18-19 but bears no

Employer signature. Id.

Relevant Provisions of the Collective Bargaining Agreement, JX 2

Pages 5-6: Article 3: Management Rights

Section 7: The terms of this written Agreement encompass all limitations and the
rights of management and no agreements, promises, customs, benefits, practices or
usage, whether written or oral, which were established or in effect before the
execution of this Agreement, will be binding upon either party subsequent to the
execution of this Agreement.

Section 8: Both parties acknowledge that during the negotiations that resulted in
this Agreement, both parties had every right to discuss and did discuss all collective
bargaining demands and proposals and that, as a result thereof, this Agreement is
complete and resolves all collective bargaining issues between the parties for its
duration. Therefore, both parties waive any right to compel or force any further
negotiations on any matters.

Pages 9-10: Article 6: Arbitration & Grievance Procedure, Section 2

Step 3: If the grievance is not satisfactorily adjusted in Step #2, the Union may,

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within thirty (30) calendar days, in writing, request arbitration. The Executive Board
of the Union shall have the exclusive right to determine whether or not the
employee's grievance shall be submitted to arbitration by the Union. The Union shall
request final and binding arbitration from the Federal Mediation and Conciliation
Service, which shall be requested to submit a panel of five (5) arbitrators. The
arbitrator shall not have the authority to add to, detract from, or amend this
Agreement. The expense of the arbitrator, except the party's own expenses, shall be
borne equally by the Union and the Employer. …

1. The Employer, in no event, shall be required to pay back wages for more than
fifteen (15) calendar days prior to the date a written grievance is filed. All awards of
back wages shall be limited to the amount of wages the employee would otherwise
have earned less any unemployment compensation or any other compensation for
his services that he may have received from any source during the period.

2. The arbitrator shall not be empowered and shall have no jurisdiction to base his
award on any alleged custom, practice or understanding which occurred prior to the
effective date of this Agreement.

3. The arbitrator’s decision or award shall be based solely on the evidence presented
to the arbitrator by the respective parties or their counsel in the presence of each
other, and the arguments presented in the written briefs of the parties.

4. The burden of proof in any discipline or discharge case before the arbitrator shall
be on the Employer. The Union or employee shall have the burden of proof in all
other cases.

Page 17: Article 17: Paid for Time

Section 2: The Employer will reimburse drivers for reasonable business related
expenses including meals and lodging incurred as a result of overnight stays or other
business directed travel. Upon presentation of receipts attached to a signed Employer
expense report, said business related expenses will be paid as soon as
administratively possible as follows:

Maximum daily meals: $38.00

Maximum Lodging: Reasonable

Page 19: Article 20: Wages

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Drivers will be paid according to the following schedules and rates:

Year 1 Year 2 Year 3

(1.12.19 – 1.11.20) (1.12.20 – 1.11.21) (1.12.21 – 1.11.22)

Layover Premium $38.00 $38.00 $38.00

Page 22: Article 23: Complete Agreement

This Agreement constitutes the sole and entire existing Agreement between the
parties hereto, supersedes all prior Agreements, oral or written, between the
Employer and the Union, and expresses all obligations of, and restrictions imposed
on, the Employer during its term. Notwithstanding any privileges or benefits
currently being received by employees, no privileges or benefits in excess of those
specifically set forth in this Agreement are required to be continued or to be granted
to employees.

The parties acknowledge that during the negotiations which resulted in this
Agreement, each had the unlimited right and opportunity to make demands and
proposals with respect to any subject or matter not removed by law from the area of
collective bargaining, and that the understandings and agreements arrived at by the
parties after the exercise of that right and opportunity are set forth in this
Agreement. Therefore, the Employer and the Union, for the life of this Agreement,
each voluntarily and unqualifiedly waives the right, and each agrees that the other
shall not be obligated, to bargain collectively with respect to any subject or matter
referred to or covered in this Agreement, or with respect to any subject or matter not
specifically referred to or covered in this Agreement, even though such subjects or
matter may not have been within the knowledge or contemplation of either or both
of the parties at the time that they negotiated or signed this Agreement.

Grievance No. 115584

The grievance, JX 1A, and the Employer response, JX 1B, both contain

typographical errors, including numerous incorrect references to the Agreement

itself, which have been corrected by the arbitrator. TR 110-111. Grievance Form No.

115584 contains the following relevant information:

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 Member’s Name [G. L. P.]
Date Grievance Arose 1-14-19 1-18-19 and 2-14-19
Date Grievance First Discussed With Company 2-1-19
Article(s) Of Contract Violated Article [17] Section 2 and pay Article [20]
Wages
State Facts Giving Rise To Grievance being pay for Article [17] Section 2 or
Article [20] Wages not both which was negotiated.
State Relief Sought pay for Article [17] Section and Article [20] Wages
Date 2-2-19
Disposition including person(s) who acted upon/discussed grievance &
date(s) 3-7-19 [B. H.] & [M. N.]. We could not agree on this. JX 1A.

The Employer’s response is dated 3/13/2019 and contains the following

relevant information:

The terminal manager’s understanding of the grievance:

Article [17] Section 2 was already an Airgas policy that a driver will receive
$38.00 for meals and have their lodging paid as part of an overnight stay (also
known as a “layover”).

Article [20] is the pay table used to calculate pay the Local 20 Drivers. The
2nd to the last line on the table shows: Layover Premium $38.00 for years 1-3
of the contract.

The grievance indicates that [G. P.] believes the Layover Premium of $38.00
in the pay table is a separate pay item than the $38 for meals in Article [17]
Section 2. The grievance also alleges this was negotiated.

The terminal manager’s response to Grievance #115584:

I did not negotiate the terms of this agreement, but was present for the
negotiations. It is my understanding that all pay items are included in the table
of Article [20]. I do not see any separation between Article [17] section 2 and
Article [20]. I see Article [20] as an affirmation of Article [17]. I see the
$38.00 as one and the same for both Articles. Article [20] is the compendium
of the pay components in the overall agreement. To my recollection, it was
never discussed at any of the 3 negotiations I attended any separate $38
payment than the one specified in Article [20]. Had there been a separate $38

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 agreement, there would have been either an additional line in Article [20]
account for each, or the Layover premium would have been at $72.00. Neither
is the case.

Thank you,

[M. N.] / Riga [Blissfield]1 Terminal Manager JX 1B.

By letter dated October 18, 2019, the Union requested arbitration:

This letter is to inform you of Teamsters Local 20’s intent to submit

grievances #162647 & 115584 for [G. P.], to arbitration per Article [6, Section
2, Step 3] of the current Collective Bargaining Agreement. JX 1C.

This is the only reference in the record to grievance #162647, which is not before

the arbitrator.

Stipulated Issue

WHETHER UNION DRIVERS ARE ENTITLED TO BOTH LAYOVER

PREMIUM AND MEAL ALLOWANCE WHEN THEY LAY OVER? TR 4.

It is important to note that the stipulated issue was drafted by the parties’

respective counsel at the beginning of the arbitration hearing and entered into the

record at the arbitrator’s direction. As stated, the issue includes, but is not limited to,

Grievant.

The Union, in its Brief @ 2, states the issue more fully:

Whether Union drivers employed by the Company, including the Grievant,

are entitled to both the Article 20 Layover Premium and the Article 17,
Section 2 meals reimbursement allowance when they lay over for business
related reasons, pursuant to the Collective Bargaining Agreement.

1
“Riga and Blissfield are the same thing … .” TR 8.

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 Background

This is a case of contract interpretation,2 so that it is unnecessary to delve

deeply into the factual background of this dispute. Airgas Merchant Gases

(“Employer” or “AMG”) operates “bulk” trucks, which deliver large amounts of

liquid gas to customers through a transfill process.3 AMG bulk truck drivers are the

only employees in the relevant bargaining unit. JX 2 is the initial contract between

AMG and Local 20.

Airgas USA, LLC – a separate operating entity from AMG, which delivers

small, individually packaged gases to customers – has a collective bargaining

relationship with Local 20 in nearby Toledo, Ohio. Historically, bulk drivers in the

Toledo area were included in that Local 20 Toledo unit alongside Airgas’s cylinder

delivery drivers. However, in early 2018, AMG decided to converge multiple nearby

AMG bulk gas service areas, and as a result, removed the bulk drivers from the Local

20 Toledo unit and into Blissfield, Michigan. Shortly thereafter, Local 20 petitioned

for all the bulk drivers in Blissfield and obtained recognition. TR 60.

The “Toledo Bulk Drivers Union Contract By and Between Teamsters Local

#20 And Airgas USA, LLC” was introduced as UX 3. It ran from February 3, 2016

2
“This is a dispute over the interpretation of the layover pay provisions of the CBA.” Employer
Brief @ 1.
3
Transfilling is the process of taking a gas source, either compressed or in liquid form (usually in
bulk containers), and transferring it into a different container (usually a smaller compressed
cylinder). http://www.dmetrain.com/license/define.cfm?glossaryid=459

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through February 2, 2019. Article 20, Section 2 provides:

The Company will reimburse driver for reasonable business related expenses
including meals and lodging incurred as a result of overnight stays or other
business directed travel. Upon presentation of receipts attached to a signed
Company expense report, said business related expenses will be paid as soon
as administratively possible.
Maximum daily meals: $38.00
Maximum Lodging: Reasonable UX 3 @ 17.

The disputed language in Article 17, Section 2 of JX 2 is virtually identical to this

language in UX 3. TR 68-69.

Schedule “A”: Wages for Classification of Bulk Drivers Only contains the

following entries:

2/3/2016 2/3/2017 2/3/2018

Layover Bonus $35.00 $35.00 $35.00 UX 3 @ 22.

Article 20 of JX 2 @ 19 is strikingly similar to this; Bonus has been replaced by

Premium and $35.00 by $38.00.

It is clear that meal reimbursement and Layover Bonus in UX 3 are separate

items:

Q. So the old contract in Toledo says $38 for meals and 35 for layover
bonuses?

A. Yes. TR 45.

See also TR 46-47 (“paid for both”).

Analysis

The similarities in UX 3 and JX 2 noted above are no coincidence because the

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parties took UX 3 as a starting point and negotiated various changes as needed or

desired. TR 62-63. For example, changes had to be made to some of the contract

language because Michigan is a right-to-work state and Ohio is not. TR 61-62. The

parties negotiated over the layover premium. The Union wanted it increased from

$35 to $50. UX 4; TR 65, 100. The Company countered with $38, which the Union

accepted. TR 67, 100, 121, 148. Because neither party had a problem with $38 for

meal money, they left that provision intact. TR 26, 68-69, 81, 89, 102-103.

The Employer implores the arbitrator to consider the parties’ intent. In

opening statement Employer counsel urged:

You'll have to look into the bargaining history to see what the true intent of
the parties was, and that intent, as far as the employer is concerned and what
we think we can prove, is that the meal allowance and the layover premium
are the same thing, $38 is what you get when you lay over. TR 12-13;
emphasis supplied.

So we ask that you do look beyond the plain words of the contract and in doing
so review all the historical evidence, in this case that makes clear the parties
true intent when they bargained this first contract. TR 13; emphasis supplied.

In the Employer’s Brief, the word “intent” is used 12 times.

The arbitrator has done as the Employer requested and has found that the

parties had different intentions. The Union’s intention was to get the same benefits

in Blissfield, Michigan as bulk drivers had in Toledo, Ohio. The Employer’s

intention was to pay a single layover benefit, as it historically had done in Blissfield.

If the Employer has been mistaken about the course of negotiations or assumed

9
understandings, there is nothing the arbitrator can do about unilateral mistakes,

either under the Agreement or under established legal principles. Elkouri & Elkouri,

How Arbitration Works (Bloomberg BNA 8th ed 2016) @ 18-43.

In the absence of a singular intent manifested in the parties’ negotiating

history, the arbitrator must look to the language that they used in their collective

bargaining agreement:

Without question, the primary goal of the labor arbitrator is to effect the intent
of the parties. Arbitrator Jules Justin, in the often-quoted Phelps Dodge
Copper Products Corp. decision [16 LA 229 (1951)], stated that the parties'
intent is to be ascertained from the words used in their agreement:

Plain and unambiguous words are undisputed facts. ... An arbitrator’s

function is not to rewrite the Parties' contract. His function is limited to
finding out what the Parties intended under a particular clause. The
intent of the Parties is to be found in the words which they, themselves,
employed to express their intent. When the language used is clear and
explicit, the Arbitrator is constrained to give effect to the thought
expressed by the words used. [16 LA @ 233].

Hill & Sinicropi, Evidence in Arbitration (BNA 2nd ed 1987) @ 347; emphasis

supplied.

Authorities are in agreement as to how an arbitrator is to interpret the meaning

of individual words:

Arbitrators give words their ordinary and popularly accepted meaning in the
absence of a variant contract definition, or extrinsic evidence indicating that
they were used in a different sense or that the parties intended some special
colloquial meaning. Consequently, in the absence of such evidence when each
of the parties has a different understanding of what is intended by certain
contract language, the party whose understanding is in accord with the
ordinary meaning of that language is entitled to prevail. How Arbitration

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 Works, supra, @ 9-22; footnotes omitted.

In the absence of a showing of mutual understanding of the parties to the

contrary, words will be read as having their ordinary and popularly accepted
meaning. Arbitrator Clyde Summers, in City of Meriden [48 LA 137 (1967)],
enunciated this rule as follows:

In interpreting collective bargaining agreements, words shall be read as

having their common meaning, unless it is clear that the parties
intended otherwise. Negotiators often are not lawyers and the collective
agreement is intended to be a practical working statement, rather than
a technical legal document. It is intended to be read and applied by
employees, union officers, supervisors, and heads of departments.
There is a heavy presumption that it is intended to mean what such
persons read it to mean, not what a lawyer can by remote inference
import into it. [48 LA @ 142].

Evidence in Arbitration, supra, @ 351-352.

The latter treatise suggests dictionaries as sources of normal usage of words.

In this case, inasmuch as the parties have discussed the tax treatment of the benefits

in dispute,4 the arbitrator turns to an authority far weightier than Black’s Law

Dictionary—THE INTERNAL REVENUE CODE, Title 26 United States Code. 26

USC § 62 provides in pertinent part:

(a) General rule For purposes of this subtitle, the term “adjusted gross
income” means, in the case of an individual, gross income minus the
following deductions:

(2) Certain trade and business deductions of employees

(A) Reimbursed expenses of employees

4
Union Brief @ 7, 11, 14, 15; TR word search: tax (12 occurrences), taxed (38), taxes (7), taxable
(3), taxing (3).

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 The deductions allowed by part VI (section 161 and following) which consist
of expenses paid or incurred by the taxpayer, in connection with the
performance by him of services as an employee, under a reimbursement or
other expense allowance arrangement with his employer. The fact that the
reimbursement may be provided by a third party shall not be determinative of
whether or not the preceding sentence applies.

A nice explanation of employee expense reimbursement can be found on the

Internet:5

The expense reimbursement process allows employers to pay back employees

who have spent their own money for business-related expenses. When
employees receive an expense reimbursement, typically they won’t be
required to report such payments as wages or income.

These types of reimbursable expenses tend to occur when employees travel

for work, but can be associated with other activities related to their
employment, including, for example, certain purchases of work-related
supplies or tools.

Having determined that “reimbursements” are not included in “adjusted gross

income”, attention must turn to Section 61 of the Internal Revenue Code to

determine the treatment of “wages”. 26 USC § 61 provides in pertinent part:

(a) General definition Except as otherwise provided in this subtitle, gross

income means all income from whatever source derived, including (but not
limited to) the following items:

(1) Compensation for services, including fees, commissions, fringe

benefits, and similar items;

Thus, “compensation” is included in “gross income”.

5
https://justworks.com/blog/expenses-101-expense-reimbursements-taxable-income

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 To understand how wages are treated, it is necessary to consult the definition

of “compensation” found in the regulations under 26 USC § 61, 26 CFR § 1.61-2:

§ 1.61-2 Compensation for services, including fees, commissions, and

similar items.

(a) In general.

(1) Wages … are income to the recipients unless excluded by law.

See also Rev Rul 2007-19 (“Courts have consistently upheld the determination that

wages fall within section 61(a)(1)’s definition of compensation and, accordingly,

constitute taxable income.”).6

Thus, “wages” are “income”, “income” is included in “gross income”, and

therefore “wages” are included in “adjusted gross income”. Since “reimbursements”

are not included in “adjusted gross income”, “wages” and “reimbursements” must

be different and distinct items under the Internal Revenue Code. Because both

parties are bound by the Internal Revenue Code, they must treat “wages” and

“reimbursements” accordingly.

Conclusion

Reimbursements and wages are distinct. Meal reimbursements are governed

by Article 17. Layover Premiums are classified as Wages under Article 20. An

employee who qualifies for both is entitled to both.

6
https://www.irs.gov/pub/irs-drop/rr-07-19.pdf

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 The Issue of Back Meal Reimbursement

In the Conclusion to its Brief @ 19, the Union asks the following:

For the foregoing reasons, the Company is obligated to pay its drivers covered
by the current CBA both a meals reimbursement, pursuant to Article 17,
Section 2 therein, and a Layover Premium, pursuant to Article 20 therein,
when drivers are forced to lay over for business related reasons. Therefore,
the Union respectfully requests that the Arbitrator sustain the grievance and
that [Grievant] and all similarly situated drivers by made whole and receive
the full amount of both Article 17 reimbursements and Article 20 Layover
Premiums they are owed, back to the effective date of the current contract,
January 12, 2019.

No specific amount of monetary relief is requested for Grievant or for any other

Union member.

The Company’s position on back meal reimbursement is set forth in its Brief

@ 9-10:

While the Employer does not concede that the CBA should be interpreted in
the Union’s favor, if the arbitrator finds that he must follow the plain text of
the CBA, then back pay for meal reimbursement is inappropriate because the
Union has made no offer of proof to support that remedy.

If the arbitrator is going to read the plain text, as the Union would have it, then
Article 17, Section 2 states that it is a “maximum” meal allowance and that
such meals must be supported by receipts. Thus, a driver would not
necessarily be entitled to $38; he would be entitled to up-to-$38 dollars, as the
word “maximum” implies (and even if it was a flat $38 payment, the Union
has offered no proof of how many layovers have occurred such that the
arbitrator could make such a calculation). Furthermore, the Employer’s
evidence proves, and the Union does not dispute, that the Blissfield Bulk
Drivers have never submitted an expense receipt for a layover meal.
Therefore, since the text would not support a reading of a flat $38 payment
and there are no receipts to support any meal reimbursements, the arbitrator
cannot fashion a back pay remedy for those meal reimbursements. (Footnote
omitted.)

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The Employer is correct as far as it goes. No receipts of any kind were submitted at

the arbitration hearing, not even the Grievant’s receipts.

Although the arbitrator has answered the question presented, because of the

lack of evidence, the arbitrator is in no position to make a monetary award. The

arbitrator can only observe that the Agreement in Article 17, Section 2 places no

time limit on seeking reimbursement for meals.

Undoubtedly, the Union will point out that receipts have not been required for

some time; instead, drivers have been paid the maximum meal allowance. TR 19,

21, 30. See, for example, Article 3: Management Rights, Section 2, ¶20 (“Give

additional benefits to the employees over and above the benefits established

herein;”), JX 2 @ 4. However, this was done under previous Toledo contracts, which

makes that practice immaterial under the current Blissfield Agreement, JX 2.

Indeed, there is no established “practice” about meal reimbursement under the

current Agreement. Drivers have been paid based upon an AMG Riga Pay Sheet (EX

4), which indicates that the Layover Rate is $38. That $38 is the Layover Premium

in Article 20. The Pay Sheet mentions nothing about meal reimbursement, which is

non-taxable. Heretofore, there has been no procedure to claim meal reimbursements.

Pertinent to the issue of meal reimbursements is Article 3, Section 3:

The exercise or non-exercise of the rights retained by the Employer shall not
be deemed to waive any such rights or the discretion to exercise any such
rights in some other way in the future. However, the union reserves the right
to grieve the reasonableness of said changes. JX 2 @ 5.

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Unless and until the Employer decides whether or not it will require receipts for meal

reimbursements, neither the arbitrator nor anyone else can make a decision about

back meal reimbursements.

The arbitrator suggests that the parties sit down together and jointly develop

forms that accurately reflect the terms of their Agreement and satisfy the parties’

record-keeping needs. He made a similar suggestion about forms in St. Petersburg

Association of Firefighters, Local 747 IAFF and City of St. Petersburg, Florida, 09-

1 ARB ¶ 4525, 2009 WL 8160737, 109 LRP 15362 (Arb 2009). With modern word-

processing and spread-sheet software, producing suitable forms is a simple matter.

Another issue that the arbitrator can address is the Union’s complaint that in

times past, its members have been given insufficient information as to which money

represents non-taxable reimbursements and which represents taxable wages:

The Company did not provide itemized pay stubs, so drivers could never be
certain what exactly they were being paid for. [TR 24]. Union Brief @ 7.

See TR 48. The Agreement now provides a solution to this problem. Article 14,

Section 1: Examination of Records states:

The Local Union shall have the right to examine time sheets and any other
records pertaining to the computation of compensation of any individual or
individuals whose pay is in dispute. Id. @ 14; emphasis supplied.

To obtain precise information about payments to its members, all the Union

has to do is to assert its rights under the Agreement. If cooperation is lacking, there

are numerous governmental agencies at the federal and state level that can ensure

16
compliance, such as IRS; US Department of Labor, Wage and Hour Division;

Michigan Department of Treasury; Michigan Bureau of Employment Relations,

Wage & Hour Division; the list goes on.

Confusion Reigned in the Interregnum

In the period between the transfer of Toledo bulk drivers to Blissfield and the

effective date of the new Agreement, the parties operated without a fixed contract.

TR 33, 73-74. Union employees were paid according to some Driver Trip Report

(EX 1 & 3) of dubious accuracy. TR 47-48, 157. There is even evidence that driver

entries on those sheets were changed by management. TR 138-139, 151. It was a

Humpty Dumpty world in which layover pay meant meal reimbursement:

“When I use a word,” Humpty Dumpty said, in rather a scornful tone, “it
means just what I choose it to mean–neither more nor less.” “The question is,”
said Alice, “whether you can make words mean so many different things.”
“The question is,” said Humpty Dumpty, “which is to be master–that’s all.”7

The language of the Agreement makes much of what happened before its

effective date immaterial, so that it would be wasteful to discuss most of those past

events and practices. Indeed, the arbitrator has never before seen such a restrictive

contract; it doesn’t just have a zipper clause;8 it has straight-jacket clauses.

7
Lewis Carroll (Charles L. Dodgson), Through the Looking-Glass, chapter 6, p 205 (1934);
https://www.bartleby.com/73/2019.html
8
How Arbitration Works, supra, Ch 12.7.

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 Award

The Stipulated Issue presented is answered in favor of the Union. The

Employer must immediately announce whether receipts are required for meal

reimbursement. Affected employees, including Grievant, may submit their claims

for back meal reimbursement to the Employer.

The arbitrator retains jurisdiction to oversee implementation of this Award.

________________________________
E. Frank Cornelius, PhD, JD, Arbitrator

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