United Food v. Commercial Workers Canada Union, Local 401, 2017 ABQB 779

Court of Queen’s Bench of Alberta Citation: United Food and Commercial Workers Canada Union, Local 401 v Sobey’s-Safeway Operations (Provincial), 2017 ABQB 779 Date: 20171215 Docket: 1601 17105 Registry: Calgary Between: United Food and Commercial Workers Canada Union, Local 401 Applicant - and - Sobey’s-Safeway Operations (Provincial) Respondent Corrected judgment: A corrigendum was issued on January 8, 2018; the corrections have been made to the text and the corrigendum is appended to this judgment. _______________________________________________________ Reasons for Decision of the Honourable Mr. Justice J.T.

Eamon _______________________________________________________ Table of Contents I. Introduction . 2

II. Facts and evidence. 3 (

i) The Conflict of Interest Policy. 4 (ii) The background and administration of the Policy. 4 (iii) Mr. Polini’s circumstances. 6 III. The Arbitrator’s reasoning. 8 IV. Standard of review.. 11 V. Analysis. 13 (

i) The limited scope of the Policy. 13 (ii) Whether the Arbitrator erred by deferring to Safeway’s conclusions. 13 (iii) Whether the Arbitrator erred in finding the Policy was enforceable. 20 (iv) Whether the Arbitrator erred in not finding a breach of the Policy. 25 (

v) Whether the Arbitrator erred in not considering a lesser sanction. 26 VI. Conclusion. 26 I. Introduction [1] Mr. Polini worked for the respondent Safeway Operations (“Safeway”) for 27 years in Safeway grocery stores, most recentlyas a full time general clerk. [2] In June 2015 Mr. Polini decided he needed a change. He submitted a request to transfer from full-time to restricted part-timestatus, and announced at a regular morning staff meeting he was taking a position at the Italian Centre.

That organization was opening anew grocery store in space which had previously been a Sobey’s grocery store and was near two Safeway grocery stores. Mr. Polinistarted working at Italian Centre on June 25, 2015. [3] Safeway had a Conflict of Interest Policy. It applied the Policy on a case by case basis. In Mr. Polini’s case, it made factualconclusions about Mr. Polini’s roles at Safeway and Italian Centre and decided to terminate Mr. Polini if he continued to work at ItalianCentre. [4] On July 27, 2015 Safeway told Mr.

Polini that if he continued to work at Italian Centre he would be terminated for being in aconflict of interest under the Policy. Mr. Polini was given until July 31, 2015 to choose between Safeway and Italian Centre. Mr. Polinisaid he wanted to work for both. Safeway terminated his employment. [5] Mr. Polini’s Union filed a grievance on July 31, 2015, that Mr. Polini had been unfairly and unjustly terminated. [6] An Arbitrator dismissed the grievance on November 24, 2016. Her decision is reported as Sobey's- Safeway Operations(Provincial) v United Food and Commercial Workers Canada Union, Local 401, (AB GA).

She found the Policywas reasonable. She saw her role in deciding whether the Policy applied to Mr. Polini as assessing the reasonableness of management’sdecision making, not the correctness of it. She found the Policy was reasonably applied by management to Mr. Polini. [7] The Union applies for judicial review of the arbitration award, pursuant to subsection 145(2) of the Labour Relations Code,RSA 2000, c L-1 as it existed prior to amendments to

section 145 that came into force September 1, 2017. [8] The Union challenges the Arbitrator’s methodology of applying deference to Safeway’s decision to apply the Policy to Mr.Polini including Safeway’s factual conclusions that underlie Safeway’s decision. It says the Arbitrator further erred in acceptingSafeway’s conclusions because there was no evidence to support them.

It further says the Arbitrator unreasonably concluded that thePolicy is enforceable. [9] Safeway generally responds that the Arbitrator properly deferred to Safeway’s conclusions and her decision was reasonable. [10] The Union further says the Arbitrator ought to have addressed progressive discipline, that is, some sanction short oftermination that would permit Mr. Polini to consider corrective action or explore other solutions. Safeway says the argument was notmade to the Arbitrator so it should not be made in this judicial review.

The Union acknowledges that this argument was not made to theArbitrator, but it was not conceded either. [11] Italian Centre has more than one store. The Arbitrator was primarily concerned about Italian Centre’s Calgary store whereMr. Polini worked, and she also heard evidence concerning another Safeway employee who worked at an Edmonton Italian Centre. Areference to Italian Centre in my reasons means the Calgary store unless otherwise specified.

II.

Facts and evidence [ 12 ] Safeway and the Union are parties to the Collective Agreement between Sobey’s West Inc. (Safeway Operations) and United Food and Commercial Workers Canada Union, Local 401. [ 13 ] The Management’s Rights clause of the Collective Agreement (Article 13) includes: 13.1 The Union agrees that the management of the Company, including the right to plan, direct and control store operations; the direction of the working force; the discharge or discipline of employees for proper cause, and those matters requiring judgment as to competency of employees, is the sole right and function of the Employer. ... 13.4 ... the discharge of employees for any reason whatsoever ... is subject to and may be processed under grievance and arbitration articles of this Agreement. [Emphasis in original] [ 14 ] The Arbitrator observed that the facts of this matter were not seriously in dispute although inferences to be drawn from those facts were hotly debated (Arbitration Decision at p 2).

The various pieces of evidence or findings of fact set out in the following paragraphs are taken from the Arbitration Decision. There was no verbatim transcript of the arbitration kept, and no additional details of the oral evidence were provided by the parties for the judicial review. (

i) The Conflict of Interest Policy [ 15 ] The Policy provides: 1. Confidentiality Safeway business information including sales figures, costs of goods from suppliers and financial information is strictly confidential and must not be discussed with anyone outside Safeway. 2. Conflict of interest Any outside activity, such as additional employment or self-employment, must be kept separate from and not conflict with your work at Safeway. You should not take work with which competes with Safeway, provides any commodity or service which Safeway provides, or deprives Safeway of business.

Any outside employment must also not take up Company work time, interfere with regular duties or require so much of your time or effort that you are too tired to do your Safeway job at full efficiency. Taking such work which would constitute a Conflict of Interest and violate this policy may result in termination of your employment with Safeway. You must promptly report to your immediate supervisor any of your personal circumstances, interests or relationships which you believe might be inconsistent with this policy. [Emphasis in original] [ 16 ] Mr.

Polini was familiar with the policy and its predecessor policies in the 1987 and 1989 Safeway handbooks. (ii) The background and administration of the Policy [ 17 ] Safeway relies heavily on part-time employees. At the store where the Mr. Polini most recently worked, 2/3 of the employees are part-time. There are two categories of part-time employees. The restricted part-time employees only have to be available for work on Sundays. This was the category to which Mr. Polini requested to be transferred, effective July 6, 2015. [ 18 ] It is not uncommon for part-time employees at Safeway to have other jobs.

Safeway does not keep track of the numbers and what jobs the employees have. There is no reporting requirement generally with respect to that, and Safeway trusts its employees will inform management if they have obtained a job which would fall under the Policy. [ 19 ] The Arbitrator described evidence she heard from Ms. Cole, a member of Safeway’s Labour Relations Department. The Labour Relations Department would not be consulted about all positions held by Safeway employees with other employers as it depends on the nature of the outside job.

If there is a “potential conflict”, store managers can contact the Human Resources Department which would contact the Labour Relations Department to deal with the matter. [ 20 ] Ms. Ahrends, of the Labour Relations Department, testified that conflicts under the Policy are reviewed on a case-by-case basis. The roles and responsibilities of the employee and his or her current position with Safeway, including the type of information that the employee has and uses in that position, and the roles and responsibilities in the position with the new employer are compared.

The primary functions of the new employer are reviewed. The purpose of this review is to assess the risk that information obtained in the

employee’s position with Safeway is useful for and could be passed to the new employer, to Safeway’s detriment. [ 21 ] Ms. Ahrends further testified that not every position with a direct competitor violates the Policy.

It is only a position which, in the opinion of Labour Relations, creates a “real and immediate risk of the advertent or inadvertent use of confidential information” which violates the Policy. [ 22 ] An example of this case by case risk assessment, mentioned by the Arbitrator, was a previous complaint made to the Labour Relations Department concerning a Safeway employee who was also working at a Walmart store. Walmart offers many goods and services not offered by Safeway, and is not “primarily just a grocer”.

Whether it is appropriate for a Safeway employee to take a position at Walmart depends on which department the employee works in at Safeway and proposes to work in at Walmart. In the previous complaint, Safeway concluded that an employee taking a position in the photo lab at Walmart did not breach the Policy. Safeway does not offer photo lab services. Also, the Policy would not preclude a Safeway produce clerk from taking a cashier position at Walmart.

A different view of the risk would exist if a Safeway produce clerk took a similar position at Walmart. [ 23 ] The Union provided evidence with respect to communication among Walmart’s retail staff. A Union witness testified that when she worked at Walmart (for three months in 2004), she observed Walmart’s communication practices with staff.

All staff attended morning meetings at which information was given with respect to upcoming promotions, items on sale and recent sale activities. [ 24 ] One Union witness attended both a Walmart and Safeway and produced pictures of a large number of identical products sold by Walmart and Safeway. [ 25 ] The Arbitrator also heard evidence about a Safeway employee who was working at an Italian Centre store in Edmonton. That employee was a full-time produce clerk for Safeway.

He started working at the Edmonton Italian Centre store on a seasonal basis many years ago, delivering grapes which it brought in for their customers for making wine. About 10 years ago he was asked by the Edmonton Italian Centre if he could work in the store for two days a week. He asked his Safeway manager if it was a problem for him to work for 4 or 5 hours at Italian Centre on his days off from Safeway, and was told it was not.

Two Safeway managers were aware that he worked at the Edmonton Italian Centre store delivering grapes and later worked in the store. [ 26 ] Neither of the Labour Relations Department witnesses called by Safeway had knowledge of the Edmonton employee’s involvement as a general clerk in the Edmonton Italian Centre. One of the managers of the Edmonton employee said he was aware the individual was doing some special events and cultural activities at that Italian Centre store, including delivering grapes.

He said he was never aware of, approved or was advised that employee was working any kind of regular shift in Italian Centre as a general clerk and if he had been made aware of that he would have taken it to his District Manager. The other manager of the Edmonton employee, who initially approved his employment at Italian Centre, does not appear to have testified. The evidence was that this manager was a long- time family friend of the Edmonton employee. (iii) Mr. Polini’s circumstances [ 27 ] The hotly debated matters of inference mentioned by the Arbitrator pertain to whether

(1) Italian Centre was a direct competitor of Safeway’s;

(2) Mr. Polini was employed in similar positions and had the same or similar roles with both Safeway and Italian Centre; and (3) there was a risk that was neither fanciful nor speculative that Mr. Polini could intentionally or inadvertently disclose Safeway’s confidential information to Italian Centre to the detriment of Safeway. [ 28 ] The Arbitrator heard evidence with respect to these matters. As discussed in

Part III below, she said her mandate was to assess whether Safeway’s conclusions on these matters were reasonable in contrast to making her own conclusions whether these inferences or conclusions should be drawn. [ 29 ] With respect to competition, the Arbitrator heard evidence about the grocery departments in Safeway stores and Italian Centre; the products sold by Safeway and Italian Centre; the size of Italian Centre’s store and its proximity to Safeway stores; and, the impact on sales and foot traffic at a nearby Safeway store after Italian Centre opened. [ 30 ] A witness from the Labour Relations Department testified to her inquiries into the products sold at Italian Centre shortly after it opened in July 2015, stating among other things that every product shown on Italian Centre’s internet site was sold by Safeway.

She noted the premises were formerly a Sobey’s grocery store and were similar in size to a small Safeway store. [ 31 ] A manager of a nearby Safeway testified to the reduction of his store’s revenues and foot traffic that he observed when Italian Centre opened nearby. [ 32 ] The Edmonton employee of the Edmonton Italian Centre testified that he did not regard the Edmonton Italian Centre store as a competitor of Safeway.

The Arbitrator observes in her Decision that cross-examination of that employee indicated the Calgary Italian Centre store had a full selection of dairy products, a produce and fresh meat section, and pastas, pasta sauces and canned goods. He further acknowledged Safeway sells dairy and produce, and that a number of products Italian Centre sells are also sold by Safeway. [ 33 ] This evidence provided a clear picture of the products sold at Italian Centre in Calgary and nearby Safeway stores.

The Arbitration Decision does not provide a comparison between the Edmonton and Calgary Italian Centre stores, such as product lines, respective proximity to Safeway stores, or impact of the Edmonton store on Safeway store revenues or traffic. [ 34 ] The Arbitrator heard evidence about Mr. Polini’s title and function in both stores. [ 35 ] In Safeway, Mr. Polini was a general clerk. The Arbitration Decision mentioned, in the context of the evidence of Mr. Powrie (who was Mr. Polini’s manager) concerning the access and use of confidential information by Safeway employees, that Mr.

Polini had duties in the produce department and back door receiving, and was involved in building and changing displays and checking items delivered against invoices to ensure the items invoiced were received. The Arbitrator did not provide details of what Mr. Polini would be

doing while a restricted part-time employee, including the type of product delivered on Sundays to the specific store where he wouldwork on back door deliveries, or the nature of his duties in the produce department on Sundays. [36] Safeway’s witness Ms. Ahrends (who, as a member of the Labour Relations Department, had discussions about Mr. Polini’ssituation with the Union before his termination and decided to terminate Mr. Polini) said she assumed Mr.

Polini was taking the samerole or a similar role and would be in the same departments at Italian Centre, and was going to be performing or potentially performingmany of the same functions that he performed at Safeway. She said she had no direct knowledge of his role. (The Arbitration Decisiondoes not recite evidence whether anyone at Safeway heard from Mr. Polini about his contemplated role at Italian Centre before he wasterminated). [37] The Arbitrator also described Mr.

Polini’s evidence about his role at Italian Centre: In his evidence, the Grievor described his job at the Italian Centre store as largely customer service. He is responsible for stocking thefreezer, taking care of orders for the freezer, and helping out with trucks arriving at the store. He is classified as a grocery clerk. [38] The Arbitrator heard evidence about Safeway’s competitive information that was available to its general clerks. [39] Mr. Powrie said that all its employees including general clerks had access to daily sales and sales projections, upcomingspecials, and marketing items.

Flyers are delivered to stores well in advance of promotions. Weekly merchandising plans andpromotional pricing are accessible well before the event. Invoices (and, in the case of produce, the produce cost and sell form) disclosingprices and margins are accessible. Access by general clerks is encouraged so that good decisions are made about marketing, ordering anddisplay of product. Mr. Polini would access that information as part of his responsibilities, which would include duties on Sundayrespecting produce and back door receiving. [40] The Arbitrator described Mr.

Polini’s evidence on this point as follows: The Grievor says that in his employment with Safeway, while he was familiar with the information described by Mr. Powrie, he did notuse most of the information which was generally utilized by department heads or seconds in command. He did acknowledge that he usedthe weekly merchandizing plans but only in the context of building and changing displays. He would also use and review the invoices butonly in the context of checking them against goods received to make sure all of them had in fact been shipped.

He also confirmed thatwhatever information he had access to at Safeway he would not disclose it and has no interest in disclosing it. [41] As mentioned, the Arbitrator said the inferences to be drawn from the evidence were hotly debated. Safeway submitted itreasonably concluded that Mr. Polini’s employment with Italian Centre posed a risk to Safeway that confidential information could bereleased to Italian Centre and thus potentially cause harm to Safeway. The Union submitted that the risk analysis was not rational in thecontext of Safeway’s permitting employees to sometimes work at Walmart.

The Union further submitted: ... the assumption that he is doing a similar job at the Italian Centre as he was and would be doing at Safeway is not supported by theevidence. The evidence is to the contrary. He is doing a different job from what he did at Safeway. III.

The Arbitrator’s reasoning [42] The Arbitrator observed that the case was about balancing the interests of Safeway’s employees to obtain outside employmentwhile retaining their employment with Safeway, and Safeway’s legitimate interest in protecting confidential information which could beused by its competitors to Safeway’s disadvantage. [43] The Arbitrator found that the Policy was primarily designed to protect the confidentiality of information.

That was notunreasonable and ensured that employees’ loyalty to Safeway is not affected by conflicting roles employees might take with a competitor.Further although the written Policy was so broad that it would likely fail to meet the reasonableness requirement set out in Re Lumberand Sawmill Workers’ Union, Local 2537 and KVP Co Ltd (1965), (ON LA), 16 LAC 73, it was not enforcedliterally.

Safeway’s process was to apply the Policy on a case-by-case basis, examining the individual circumstances of the employee,the primary function of the new employer, the employee’s roles and responsibilities in the new position, and the employee’s roles andresponsibilities with Safeway, with a view to assessing the extent of the risk that Safeway faced regarding its confidential information.There was nothing unreasonable about that process. [44] The Arbitrator then turned to the issue whether Safeway’s administration of the process in Mr. Polini’s case wasunreasonable. She stated: ...

In that regard the role of the arbitrator is to assess the reasonableness of management’s decision-making, not the correctness of it.…” (Arbitration Decision at p 13) [45] The Arbitrator held that: Applying the standard of reasonableness, based on the evidence before me, I have no difficulty concluding that the process used bySafeway to determine whether there is a violation of its conflict policy is reasonable in general terms.

The process that is employed toanalyze whether a breach of the policy has occurred is designed to allow reasonable latitude to employees to seek out and obtainemployment, even with direct competitors. The examination focusses on what the nature of the risk is for Safeway with respect to itsconfidential information.

If the employee is working in a similar position for both employers and the employee not only had access to butused confidential information as a necessary incident to his or her job with Safeway, does Safeway consider that the employee isprecluded from taking the new position by the terms of the conflict policy. In my view that represents an appropriate balance in that itreduces the risk of the advertisement or inadvertent sharing of confidential information, without unduly restricting the right of employeesto seek other positions….

(Arbitration Decision at p 14) [ 46 ] The Arbitrator held that the policy was utilized reasonably in Mr. Polini’s case. She found that in determining Mr. Polini breached the Policy, Safeway reached the following conclusions:

(1) Italian Centre was a direct competitor of Safeway’s;

(2) Mr. Polini was employed in similar positions – general clerk – with both Safeway and Italian Centre; and (3) in his position at Safeway, Mr. Polini had access to and more importantly used confidential information that Safeway deemed to be confidential and which could damage Safeway if shared. (Arbitration Decision at p 14) [ 47 ] The Arbitrator observed that the Union challenged the reasonableness of each of these conclusions, arguing Italian Centre was not a direct competitor, Mr.

Polini had different roles and responsibilities in the two stores, and the conclusion about the risk of sharing confidential information was speculative and not real. [ 48 ] The Arbitrator turned to a discussion of each of Safeway’s conclusions.

Again, she premised her discussion with the reasonableness standard of review: Accepting that the standard of review of management’s decision is reasonableness, I have reviewed each of the conclusions relied upon by Safeway to determine the reasonableness of those conclusions. (Arbitration Decision at p 14) [ 49 ] With respect to the competitive position, the Arbitrator referred to the evidence and observed with respect to Italian Centre including its location, size, and impact: The evidence with respect to the Italian Centre was that it operated in a location that was the size of a small Safeway store, that it offered a full complement of grocery products and departments and that it sold products similar and in some cases the same as sold by Safeway.

Moreover, Safeway’s evidence was that at one of its stores, the closest to the Italian Centre, the opening of the Italian Centre has resulted in a weekly loss of sale [sic] totalling approximately $30,000. The Union’s argument that the Italian Centre was a niche vendor of imported products is belied by the marketing conducted on its webpage.

The fact that it may not be the same behemoth and fierce a competitor as Walmart does not alter the fact that on the usual yardstick of competition Italian Centre is a direct competitor, and unlike Walmart which is essentially a downscale department store, is a grocery retailer .... (Arbitration Decision at p 15) [Underlining added] [ 50 ] With respect to the relative similarity of the employee’s job functions, the Arbitrator was much less definitive in her conclusion. She said: The Griever's job at both employers is classified as a general clerk.

The Union argues that the Grievor is in fact engaged in rather restricted functions at the Italian Centre, and would be engaged in similarly restricted functions at Safeway in his restricted part-time role. Safeway says that he has the same position in both stores, and the functions associated with each of the position would increase the risk of confidential information being shared. Safeway provided evidence of a number of pieces of confidential information that the Grievor would have in his role with Safeway accessed and used.

The Grievor asserted that while he might have access to and review some of that information, for example for display purposes, and for checking orders, even in his restricted part-time work, he had no interest in most of the information and would not share it. He particularly said that in his typical role at the Italian Centre he was not working in areas similar to where he would be working at Safeway, implicitly suggesting that whatever information he had from Safeway would not be of use or interest to him in his job at the Italian Centre.

Given the evidence before me, I cannot find that Safeway's conclusions respecting the similar roles and functions and the risk of sharing existed, even if inadvertently, are unreasonable. That risk is enhanced because the Grievor has a full-time position with the Italian Centre and therefore spends many more hours there then [sic] he will at Safeway which provides more opportunity for accidental shop floor discussion. I understand that every employee at Safeway has access to the information described by Safeway's witnesses.

However not every employee not only has access but uses that information as part of his or her job functions and in fact is actively required to and encouraged to do so. The Grievor falls into the latter category. (Arbitration Decision at p 15) [Underlining added] [ 51 ] It is apparent from this passage that the Arbitrator neither accepted nor rejected Mr. Polini’s evidence with respect to his role at Italian Centre, and did not relate it to his customer service functions which she described (see para 37 above).

Rather, she concluded only that on the evidence, she could not find that Safeway’s conclusions were unreasonable. [ 52 ] As to risk of harm, the Arbitrator cited previous arbitration decisions to the effect that access to confidential information is sufficient to justify enforcement of a conflict policy against the grievers. She observed: In all of these cases the access to confidential information was sufficient to justify enforcement of the conflict policy against the grievers. In this case Safeway's enforcement of the policy does not go so far.

It acknowledges that all employees have access to confidential information through a number of sources. It limits the application of the policy to circumstances where the employees [sic] is proposing to work in a similar position to that he or she works in at Safeway and where the employee accesses and uses confidential information as

an incident to that position . (Arbitration Decision at p 16) [Underlining added] [ 53 ] The Arbitrator concluded that in all circumstances Safeway’s application of the Policy was not unreasonable (Arbitration Decision at p 16). Further, Safeway was not required to prove that information was passed, but only that there is a potential for doing so ( ibid ).

She was satisfied that Safeway met that burden and that Safeway was not obliged to bear the risk of information actually passing ( ibid ). [ 54 ] The Arbitrator rejected the Union’s argument that the Policy was not being enforced consistently. [ 55 ] She found there was a reasonable explanation for Safeway permitting employees to sometimes work at Walmart. Safeway would allow employees to work for direct competitors as long as the employee is not working in the same department as he or she worked at Safeway.

Safeway assessed the risk of confidential information being shared in those circumstances as one that Safeway was prepared to bear. That represented a reasonable balancing of the interests of Safeway and its employees. [ 56 ] With respect to the Edmonton employee working for Italian Centre in Edmonton, the Arbitrator noted that whether his situation was the same as Mr. Polini’s situation was not entirely supported by the evidence.

However leaving that aside, there was no evidence that the Labour Relations Department, which was responsible for enforcing the Policy, had any knowledge of the matter, so the circumstances were not sufficient to establish an inconsistent enforcement of the Policy. IV. Standard of review [ 57 ] The standard of review is reasonableness ( Association of Justice Counsel v Canada (Attorney General) , 2017 SCC 55 at para 17 ). Arbitrators are owed deference on the

interpretation and application of collective agreements ( ibid at paras 17 and 47). [ 58 ] This standard was framed by the Supreme Court of Canada in Dunsmuir v. New Brunswick , 2008 SCC 9 , [2008] 1 SCR 190. In Newfoundland and Labrador Nurses’ Union v.

Newfoundland and Labrador (Treasury Board) , 2011 SCC 62 , [2011] 3 SCR 708 at para 11 the Court re-iterated it as follows: It is worth repeating the key passages in Dunsmuir that frame this analysis: Reasonableness is a deferential standard animated by the principle that underlies the development of the two previous standards of reasonableness: certain questions that come before administrative tribunals do not lend themselves to one specific, particular result. Instead, they may give rise to a number of possible, reasonable conclusions.

Tribunals have a margin of appreciation within the range of acceptable and rational solutions. A court conducting a review for reasonableness inquires into the qualities that make a decision reasonable , referring both to the process of articulating the reasons and to outcomes. In judicial review, reasonableness is concerned mostly with the existence of justification, transparency and intelligibility within the decision-making process . But it is also concerned with whether the decision falls within a range of possible, acceptable outcomes which are defensible in respect of the facts and law. . . .

What does deference mean in this context? Deference is both an attitude of the court and a requirement of the law of judicial review. It does not mean that courts are subservient to the determinations of decision makers, or that courts must show blind reverence to their

interpretations, or that they may be content to pay lip service to the concept of reasonableness review while in fact imposing their own view. Rather, deference imports respect for the decision-making process of adjudicative bodies with regard to both the facts and the law. The notion of deference “is rooted in

part in respect for governmental decisions to create administrative bodies with delegated powers” . . . .

We agree with David Dyzenhaus where he states that the concept of “deference as respect” requires of the courts “not submission but a respectful attention to the reasons offered or which could be offered in support of a decision” . . . . [Emphasis added; citations omitted; paras. 47-48.] [Underlining in passage quoted] [ 59 ] The Court in Newfoundland and Labrador Nurses’ Union further observed at para 12: ... the notion of deference to administrative tribunal decision-making requires “a respectful attention to the reasons offered or which could be offered in support of a decision”.

In his cited article, Professor Dyzenhaus explains how reasonableness applies to reasons as follows: “Reasonable” means here that the reasons do in fact or in principle support the conclusion reached. That is, even if the reasons in fact given do not seem wholly adequate to support the decision, the court must first seek to supplement them before it seeks to subvert them .

For if it is right that among the reasons for deference are the appointment of the tribunal and not the court as the front line adjudicator, the tribunal’s proximity to the dispute, its expertise, etc, then it is also the case that its decision should be presumed to be correct even if its reasons are in some respects defective. [Emphasis added.] [Underlining in passage quoted] [ 60 ] Underlying this review is “a respectful appreciation that a wide range of specialized decision-makers routinely render decisions in their respective spheres of expertise, using concepts and language often unique to their areas and rendering decisions that are often counter-intuitive to a generalist” ( Newfoundland and Labrador Nurses’ Union at para 13).

In assessing whether the decision is reasonable in light of the outcome and the reasons, courts must show “respect for the decision-making process of adjudicative bodies with regard to both the facts and the law”, and this means that courts “should not substitute their own reasons, but they may, if they find it necessary, look to the record for the purpose of assessing the reasonableness of the outcome.” ( ibid at para 15). [ 61 ] The Court must also be mindful that

Reasons may not include all the arguments, statutory provisions, jurisprudence or other details the reviewing judge would have preferred, but that does not impugn the validity of either the reasons or the result under a reasonableness analysis. A decision-maker is not required to make an explicit finding on each constituent element, however subordinate, leading to its final conclusion. ...

In other words, if the reasons allow the reviewing court to understand why the tribunal made its decision and permit it to determine whether the conclusion is within the range of acceptable outcomes, the Dunsmuir criteria are met. ( ibid at para 16) [ 62 ] Similarly, the decision “should be approached as an organic whole, without a line-by-line treasure hunt for error” ( Communications, Energy and Paperworkers Union of Canada, Local 30 v. Irving Pulp & Paper, Ltd . , 2013 SCC 34 , [2013] 2 SCR 458 at para 54 ). V. Analysis (

i) The limited scope of the Policy [ 63 ] The Arbitrator found that Safeway did not apply the Policy literally, but rather on a case by case basis. The Arbitrator said Ms. Ahrends testified that the Policy was applied where in the opinion of the Labour Relations Department there was a “real and immediate risk” of disclosure of Safeway’s confidential information (Arbitration Decision at p 5).

The Arbitrator’s findings of when the Policy applied in a case where the issue was disclosure of confidential information were as follows: …The examination focusses on what the nature of the risk is for Safeway with respect to its confidential information. If the employee is working in a similar position for both employers and the employee not only had access to but used confidential information as a necessary incident to his or her job with Safeway, does Safeway consider that the employee is precluded from taking the new position by the terms of the conflict policy.

In my view that represents an appropriate balance …. (Arbitration Decision at p 14) … It limits the application of the policy to circumstances where the employees [sic] is proposing to work in a similar position to that he or she works in at Safeway and where the employee accesses and uses confidential information as an incident to that position. (Arbitration Decision at p 16) [ 64 ] I take from these passages that the Arbitrator concluded from the evidence that where the factual concern is potential disclosure of confidential information, the Policy only applies where the employee is proposing to work for a direct competitor in a similar position to that he or she works in at Safeway and accesses and uses Safeway’s confidential information as an incident to that position.

The Arbitrator accepted that in these circumstances, there would be a sufficient risk of disclosure of confidential information to justify the application of the Policy. [ 65 ] The key issues in this case were whether Italian Centre was a direct competitor, and whether Mr. Polini proposed to work in the same or a similar role at Italian Centre. (ii) Whether the Arbitrator erred by deferring to Safeway’s conclusions [ 66 ] The Union submits that the Arbitrator unreasonably deferred to Safeway’s decision to terminate Mr. Polini, by limiting her consideration to whether Safeway conducted a reasonable assessment.

The Union submits that Safeway bore the legal onus to prove it had cause to terminate and that its Policy was fairly applied. This includes the onus to prove that the incident relied on occurred. [ 67 ] Safeway responds that the Union’s criticism of the Arbitrator is unjustified. The KVP test required the Arbitrator to assess the reasonableness of Safeway’s actions, and that the just cause standard for termination is frequently equated with the concept of reasonableness, especially in cases involving a workplace rule.

Safeway cites the board of arbitration decision of Professor Bora Laskin, as he then was, in Re United Electrical Workers, Local 524, and Canadian General Electric Co. , Ltd (1959), 5 LAC 1939 at p 1941 : It is clear from this

article that the Company’s power to discipline is subject to grievance in respect of its reasonableness. In the Board’s view, “reasonableness” here covers not only whether a proper ground exists but also the nature and severity of the sanction.” [ 68 ] I do not agree with Safeway’s position. Safeway’s case was that the Policy was not literally applied (Arbitration Decision at p 13). Safeway bore the onus to prove the underlying facts and that the Policy applied.

The Arbitrator was responsible for assessing the evidence, finding facts and determining whether the Policy applied. [ 69 ] It is important to be mindful of the general background of grievance arbitrations. [ 70 ] A grievance over a disciplinary matter typically comprises two distinct concepts: whether the employer had cause, and if so, whether the sanction was appropriate.

Brown and Beatty, Canadian Labour Arbitration (4th ed. (loose-leaf)), vol. 1) state at para 7:4000: In any grievance in which the employee challenges the propriety of a disciplinary sanction, arbitrators and the courts are agreed that there are two distinct, though necessarily related, issues that must be addressed. First, it must be determined whether the employer had cause to discipline the employee and then a separate assessment must be made about whether the penalty it selected was appropriate.

On the issue of cause, the arbitrator must be satisfied that the grievor did what the employer claims justified it in invoking its disciplinary powers and that the conduct was of a character that warranted punishment. In cases where both such conditions have been met, arbitrators have

consistently perceived their mandate, which is now codified in all federal and provincial labour relations legislation, is then to assess thefairness of the particular penalty imposed. If an arbitrator finds that the penalty chosen by the employer was not just and reasonable, he orshe will substitute one that is.” The same point appears at para 7:3000: Most collective agreements provide that, in order to impose discipline on an employee, an employer must prove that it had just orreasonable cause for whatever penalty it imposed.

Arbitrators are agreed that in order to satisfy this standard, an employer must establishthat the employee has acted in a way ... that is incompatible with or prejudices some legitimate interest of the employer ... [Footnotes omitted; underlining added] [71] Similarly, the Supreme Court of Canada observed in Toronto (City) Board of Education v. O.S.S.T.F., District 15, (SCC), [1997] 1 SCR 487 at p 509: The first step in any inquiry as to whether an employee has been dismissed for “just cause” is to ask whether the employee is actuallyresponsible for the misconduct alleged by the employer.

The second step is to assess whether the misconduct gives rise to just cause fordiscipline. The final step is to determine whether the disciplinary measures selected by the employer are appropriate in light of themisconduct and the other relevant circumstances. See Heustis, [ (SCC), [1979] 2 SCR 768], at p. 772. There are many examples of arbitrators taking the same approach. See for example, Re Wm.

Scott and Co., [1977] 1 Can LLBR 1 at pp5 - 6. [72] An arbitrator’s responsibility to make his or her own assessment is further reflected in the matter of the sanction to impose.Brown and Beatty, supra at para 7:4100, observe that it is generally accepted that unless the collective agreement or legislationotherwise provides (for example where a specific penalty is agreed in the Collective Agreement), an arbitrator’s power to assess theappropriateness of the sanction imposed is broad and largely unfettered.

They continue: The purpose of their review is to determine for themselves that a sanction is just and reasonable in all the circumstances – that thepenalty “fits the crime”. [Underlining added] [73] Brown and Beatty, supra at para 7:4100, point out that sometimes an arbitrator may be more deferential on sanction.

Forexample, some arbitrators have relaxed the standard of review when the penalty falls within a range of reasonable responses to thesituation, though as illustrated in footnote 3 of para 7:4100, some arbitrators take the view arbitrators are required to second guessmanagement while some latitude may be accorded in the context of intermediate penalties. [74] The above approach to sanction is reflected in the Labour Relations Code, subsection 142(2): 142

(2) Where an arbitrator, arbitration board or other body determines that an employee has been discharged or otherwise disciplinedby an employer for cause and the collective agreement does not contain a specific penalty for the infraction that is the subject of thearbitration, the arbitrator, arbitration board or other body may substitute for the discharge or discipline some other penalty that, in itsopinion, is just and reasonable in the circumstances. [75] The foregoing are ample authority for the proposition that the facts supporting just cause for discipline or termination must beproved.

A labour arbitrator’s role is not to conduct a mere reasonableness review of management’s conclusion that just cause exists. [76] Should the result be any different where the basis for discipline is breach of a rule or policy unilaterally imposed by theemployer? Where the alleged cause is breach of a policy or rule unilaterally imposed by management and not subsequently agreed to bythe union, the policy or rule must be assessed under the KVP test.

However, that does not displace the Arbitrator’s responsibility, inaccordance with the general scheme of grievance arbitration, to find facts relating to the specific grievance and determine whether properor just cause for termination has been established. [77] The background and scope of management’s unilateral rule-making authority under a collective agreement and the KVPreasonableness assessment are described by the Supreme Court of Canada in Irving Pulp & Paper as follows: [22] When employers in a unionized workplace unilaterally enact workplace rules and policies, they are not permitted to“promulgate unreasonable rules and then punish employees who infringe them” (Re United Steelworkers, Local 4487 & John Inglis Co.Ltd. (1957), 7 L.A.C. 240 (Laskin), at p. 247; see also Re United Brewery Workers, Local 232, & Carling Breweries Ltd. (1959), 10L.A.C. 25 (Cross)). [23] This constraint arises because an employer may only discharge or discipline an employee for “just cause” or“reasonable cause” — a central protection for employees.

As a result, rules enacted by an employer as a vehicle for discipline must meetthe requirement of reasonable cause (Re Public Utilities Commission of the Borough of Scarborough and International Brotherhood ofElectrical Workers, Local 636 (1974), (ON LA), 5 L.A.C. (2d) 285 (Rayner), at pp. 288-89; see also UnitedElectrical, Radio, and Machine Workers of America, Local 524, in re Canadian General Electric Co. Ltd. (Peterborough) (1951), 2L.A.C. 688 (Laskin), at p. 690; Re Hamilton Street Railway Co. and Amalgamated Transit Union, Division 107 (1977), (ON LA), 16 L.A.C. (2d) 402 (Burkett), at paras. 9-10; Ronald M.

Snyder, Collective Agreement Arbitration in Canada (4th ed.2009), at paras. 10.1 and 10.96). [24] The scope of management’s unilateral rule-making authority under a collective agreement is persuasively set out inRe Lumber & Sawmill Workers’ Union, Local 2537, and KVP Co. (1965), (ON LA), 16 L.A.C. 73 (Robinson). Theheart of the “KVP test”, which is generally applied by arbitrators, is that any rule or policy unilaterally imposed by an employer and not

subsequently agreed to by the union, must be consistent with the collective agreement and be reasonable (Donald J. M. Brown and DavidM. Beatty, Canadian Labour Arbitration (4th ed. (loose-leaf)), vol. 1, at topic 4:1520). [25] The KVP test has also been applied by the courts. Tarnopolsky J.A. launched the judicial endorsement of KVP inMetropolitan Toronto (Municipality) v.

C.U.P.E. (1990), (ON CA), 74 O.R. (2d) 239 (C.A.), leave to appeal refused,[1990] 2 S.C.R. ix, concluding that the “weight of authority and common sense” supported the principle that “all company rules withdisciplinary consequences must be reasonable” (pp. 257-58 (emphasis in original)). In other words: The Employer cannot, by exercising its management functions, issue unreasonable rules and then discipline employees for failure tofollow them. Such discipline would simply be without reasonable cause.

To permit such action would be to invite subversion of thereasonable cause clause. [p. 257] [26] Subsequent appellate decisions have accepted that rules unilaterally made in the exercise of management discretionunder a collective agreement must not only be consistent with the agreement, but must also be reasonable if the breach of the rule resultsin disciplinary action (Charlottetown (City) v. Charlottetown Police Association (1997), (PE SCAD), 151 Nfld. &P.E.I.R. 69 (P.E.I.S.C. (App. Div.)), at para. 17; see also N.A.P.E. v.

Western Avalon Roman Catholic School Board, 2000 NFCA 39, 2000 NFCA 39, 190 D.L.R. (4th) 146, at para. 34; St. James-Assiniboia Teachers’ Assn. No. 2 v. St. James-Assiniboia SchoolDivision No. 2, 2002 MBCA 158 , 222 D.L.R. (4th) 636, at paras. 19-28). [27] In assessing KVP reasonableness in the case of unilaterally imposed employer rules or policies affecting employeeprivacy, arbitrators have used a “balancing of interests” approach.

As the intervener the Alberta Federation of Labour noted: Determining reasonableness requires labour arbitrators to apply their labour relations expertise, consider all of the surroundingcircumstances, and determine whether the employer’s policy strikes a reasonable balance.

Assessing the reasonableness of an employer’spolicy can include assessing such things as the nature of the employer’s interests, any less intrusive means available to address theemployer’s concerns, and the policy’s impact on employees. [I.F., at para. 4] [78] In the subsequent decision of Association of Justice Counsel v Canada (Attorney General) in 2017, the Supreme Court ofCanada made clear that this balancing of interests approach requires the arbitrator to determine what is reasonable, not merely to reviewand determine if management’s decision was within a continuum of reasonable outcomes. [79] In that case, management submitted the “adjudicator’s role was to decide whether the employer’s mandatory standbydirective was within the range of possible, reasonable choices that have a supportable relationship with the employer’s operationalneeds”, citing an arbitrator’s decision in United Nurses of Alberta v.

Alberta Health Services, (AB GA) at p 12 forits proposed approach. [80] The Court rejected that submission, reasoning: 27. In my view, the United Nurses of Alberta approach is problematic, as it imports the judicial review reasonableness inquiry into thelabour arbitrator’s task of assessing the exercise of management rights. This conflates the distinct roles that arbitrators and reviewingcourts play in the context of labour grievances.

It also runs counter to this Court’s recent endorsement in Irving of the KVP test.Furthermore, the arbitrator’s statements in United Nurses of Alberta appear to have been directed solely at determining whether anexercise of management rights was reasonable.

Here, the language of clause 5.02 of the collective agreement also required theadjudicator to decide whether the directive was a fair exercise of management rights that had been made in good faith. [81] Again, at para 32 the Court re-iterated: The adjudicator’s task was to draw on his specialized labour expertise and consider whether, in this particular context, the balancestruck by the directive was reasonable (Irving, at para. 27). [82] The KVP decision has the same effect.

In that case the Board summarized its analysis of the effect of rules imposedunilaterally by management as follows: I – Characteristics of Such Rule 1. It must not be inconsistent with the collective agreement 2. It must not be unreasonable. 3. It must be clear and unequivocal. 4. It must be brought to the attention of the employee affected before the company can act on it. 5. The employee concerned must have been notified that a breach of such rule could result in his discharge if the rule is used asfoundation for discharge. 6.

Such rule should have been consistently enforced by the company from the time it was introduced. II – Effect of Such Rule re Discharge 1. If the breach of the rule is the foundation for the discharge of an employee such rule is not binding upon the board of arbitrationdealing with the grievance, except to the extent that the action of the company in discharging the grievor, finds acceptance in the view ofthe arbitration board as to what is reasonable or just cause. 2. In other words, the rule itself cannot determine the issue facing an arbitration board dealing with the question as to whether or not

the discharge was for just cause because the very issue before such a board may require it to pass upon the reasonableness of the rule or upon other factors which may affect the validity of the rule itself. 3. The rights of the employees under the collective agreement cannot be impaired or diminished by such a rule but only by agreement of the parties. ( KVP at pp 85 - 86) [Underlining added] [ 83 ] Safeway’s authorities cited in argument do not say that the KVP reasonableness assessment relieves Safeway of its burden to prove the underlying facts.

In KVP , the underlying facts that the employee’s wages were repeatedly garnished were proved. In Re Calgary Co-operative Association Co. and Calco Union (1991), 25 CLAS 379 (AB GA), the underlying facts that the employee’s application for a fidelity bond was denied by the insurer and the employee had a previous criminal conviction for fraud, were proved. In Canadian General Electric , the employee was disciplined for failing to punch his ticket in the time clock.

The underlying factual issue was whether the time clock was defective or the employee failed to punch his ticket, and it was proved the clock was not defective. The Board found the policy to be reasonable and that the employee breached the policy. It then applied a reasonableness standard to a monetary sanction provided in management’s unilaterally imposed rule which was short of termination. [ 84 ] Safeway’s submission suffers the same defect as management’s position in Association of Justice Counsel .

Adopting the words of that case, Safeway’s position “imports the judicial review reasonableness inquiry into the labour arbitrator’s task of assessing the exercise of management rights”. Although there may be some leeway in terms of sanction in appropriate cases, an arbitrator must find the underlying facts and ascertain whether there is proper cause for discipline or termination. [ 85 ] In

summary, Safeway bore the onus of proving the underlying facts, not merely that its application of the Policy was reasonable. You cannot assess reasonableness until the facts are determined. The Arbitrator’s responsibility was to find the facts, then assess reasonable cause. [ 86 ] Did the Arbitrator depart from this requirement?

Safeway suggests that the Arbitrator made her own fact findings and I could “supplement” her reasons. [ 87 ] I agree the standard of review requires me to pay respectful attention to the reasons offered or that could be offered in support of the Arbitrator’s Decision, and I should seek to supplement reasons for the decision under review that do not seem wholly adequate.

If I were satisfied that the Arbitrator actually adopted Safeway’s factual conclusions as correct and that they were well grounded in evidence and not reasonably disputable, it may be appropriate to find that the result was not tainted merely by the Arbitrator’s expression of deference to Safeway’s factual conclusions. [ 88 ] The Arbitrator actually agreed with Safeway that it and Italian Centre were direct competitors. Her language, quoted at para 49 above, leaves no room to doubt that she agreed with Safeway’s conclusion on this point.

All the evidence the Arbitrator describes supports that they were competitors and I can see no basis on any standard to disagree with her conclusion that by the usual yardstick Safeway and Italian Centre were competitors. I would not interfere merely because she said she applied a reasonableness standard. [ 89 ] In contrast, both the language and reasoning of the Arbitration Decision make clear that the Arbitrator did not make her own conclusions of fact on Safeway’s second and third factual conclusions which I have described in para 46 above. I repeat them for convenience:

(2) Mr. Polini was employed in similar positions – general clerk – with both Safeway and Italian Centre; and (3) in his position at Safeway, Mr. Polini had access to and more importantly used confidential information that Safeway deemed to be confidential and which could damage Safeway if shared. [ 90 ] As mentioned in

Part III above, the Arbitrator repeatedly stated that she applied the reasonableness standard. The Arbitrator’s description of the evidence makes clear that she did not make her own fact finding on the second and third issues. She reasoned that she could not say Safeway’s conclusion concerning similar roles and functions and the risk of information sharing was unreasonable on the record before her. Those reasons were in stark contrast to her very definitive conclusion that the stores were in direct competition: “...

The Union’s argument that the Italian Centre was a niche vendor of imported products is belied by the marketing conducted on its webpage. On the usual yardstick of competition the Italian Centre is a direct competitor...” (quoted at length in para 49 above). [ 91 ] Mr. Polini’s evidence was critical to assessing the disclosure risk, and therefore, whether there was reasonable or proper cause for discipline. Mr. Polini and the Union were saying at the arbitration that Mr.

Polini did not have the same or a similar role in each store, and suggesting that whatever information he had from Safeway would not be of use or interest to Mr. Polini in his job at Italian Centre. [ 92 ] As I observed at para 51 above, the Arbitrator did not relate Mr. Polini’s evidence of his customer service role to his functions as a restricted part-time employee at Safeway. Is customer service at Italian Centre the same as or similar to a grocery clerk at Safeway? Is customer service more like a cashier as opposed to someone who uses merchandising information to build store displays?

The Arbitrator needed to delve into this issue, to ascertain in the context of the risk assessment whether Mr. Polini’s function at Italian Centre was the same or sufficiently similar to his function at Safeway. She did not do so because she applied the wrong standard. [ 93 ] With respect, Mr. Polini and the Union were entitled to the Arbitrator’s findings of fact - not Safeway’s findings of fact - about Mr.

Polini’s functions at Italian Centre, and the Arbitrator’s assessment - not Safeway’s assessment - whether those facts, in the context of all the other evidence about risk of disclosure of information, came within the limited scope of the Policy as read down by the Arbitrator. [ 94 ] It is important to recognize that Safeway limited the application of its Policy, and accepted that some Safeway employees who actually accessed and used Safeway’s confidential information were permitted under the Policy to work at direct competitors’ retail stores. If the Arbitrator had seen her role as deciding the details of Mr.

Polini’s functions and making a contextual risk-based assessment of whether customer service at Italian Centre was similar to a grocery clerk at Safeway, she may well have concluded that in Mr. Polini’s case the risk of information disclosure was more akin to that of a Safeway employee working as a cashier at a retailer such as Walmart.

[ 95 ] If the correct question had been asked, the answer may well have been different in this case. This amounts to unreasonableness under the standard of review authorities discussed earlier, because the Arbitrator unreasonably deferred to Safeway, the error is plainly seen and can be articulated with certainty, and it significantly affected or tainted the result. It is not nit-picking or treasure hunting the reasons or an immaterial error.

I cannot “supplement” the reasons in the sense used in Newfoundland and Labrador Nurses’ Union , because it is not apparent that the Arbitrator would have sided with Safeway on its second and third factual conclusions if the proper question had been asked. The absence of the fact findings taints the decision that Mr. Polini was properly disciplined to the standard in

Article 13.1 of the Collective Agreement. [ 96 ] The Arbitrator’s finding that the Policy applied to Mr. Polini’s circumstances therefore cannot stand. I note that the Arbitrator adopted the reasonableness standard without the benefit of the reasons of the Supreme Court of Canada in Association of Justice Counsel , which was decided after her decision. (iii) Whether the Arbitrator erred in finding the Policy was enforceable [ 97 ] The Union says Safeway failed to prove that the Policy was enforceable. It contends that Safeway has to prove all the elements of

Part I of the KVP test (listed in para 82 above). [ 98 ] The Union says the second, third, fourth and sixth elements are not met. Generally, the Policy does not inform the employees they must ask for permission; enforcement was left to the discretion of local store managers, without guidelines for when the matter should be referred to the Labour Relations Department; and, the factors for assessing whether the Policy applies are not defined in the Policy.

The Union emphasized in its oral submissions that there are no provisions for consistent enforcement: jobs at other entities are not tracked, there is no reporting mechanism to the Labour Relations Department; and, there is no mechanism to evaluate the application of the Policy. [ 99 ] The Arbitrator found the Policy to be reasonable, in that it was not applied literally but rather on a case by case basis and only where the employee proposed to work for a direct competitor in the same or a similar role, and having accessed and used confidential information of Safeway (see

Part V(

i) above). [ 100 ] The great difference between the written Policy and the circumstances in which it was actually enforced is concerning. It makes the Policy liable to inconsistent enforcement, should personnel not be properly trained to administer it at the store and higher levels.

Against that must be weighed the need for flexibility and discretion, because the existence of a potential conflict of interest is highly fact specific. [ 101 ] In Carlson Engineered Composites Inc. v Manitoba Fibreglass Union , 2011 CarswellMan 783 at para 63 , the grievance arbitrator observed that it is appropriate that employees be required to disclose employment with a direct competitor and be advised that such employment could result in suspension/termination if the employee is determined to be in conflict.

The arbitrator in that case observed there must be discretion to permit the employer to determine whether an actual or real potential conflict exists.

See also Edmonton (City) v Amalgamated Transit Union, Local No 569 , 2017 ABQB 59 at para 157 , where Justice Graesser cited authority for the proposition that the discretion and flexibility that are inherent in a properly structured attendance management program are not inconsistent with the sixth KVP criterion. [ 102 ] The Policy might have been better worded if it identified the circumstances mentioned in it as potential conflicts of interest, which would require a case by case assessment to ascertain whether a disqualifying conflict of interest existed. [ 103 ] However, the Policy requires an employee to report cases which he or she believes contravene the Policy, and says taking such work which would constitute a breach of the Policy may result in termination.

A reasonable person would obviously take these provisions as requiring disclosure to management for assessment. There is no evidence mentioned by the Arbitrator that any employee was misled, failed to report, or did not understand that if they worked for a competitor there may be a conflict issue to be decided by management. [ 104 ] The Union also says at para 71 of its written brief that the arbitrator misconstrued the reasons in Re Bada Holding Co (Rose City IGA) and UFCW, Local 175 , 1988 CarswellOnt 5939, 12 CLAS 46 (ON GA) . I do not agree.

Bada points out that not any employee in any job in a retail store is prohibited from working for a competitor. Safeway’s Policy as interpreted by the Arbitrator does not prohibit every employee from working for a competitor. The Arbitrator’s conclusion is consistent with Bada . [ 105 ] The Arbitrator is to apply her expertise in labour relations. Her reasons are cogent with respect to the reasonableness of the Policy and supported by precedents cited by her.

The fact the Policy might contain more pointed or better wording does not indicate that her decision is unreasonable. [ 106 ] I turn to the issue of consistency of enforcement. The Union argues, among other things, that a rule that is not clear may be difficult if not impossible to consistently enforce. Further, the Union submits the Arbitrator placed the burden on it to prove compliance with the sixth KVP factor. [ 107 ] The Union is correct that the Policy does not provide guidance to managers about when to escalate the issue to the Labour Relations Department.

The Policy does not identify the relevant decision-making authority in Safeway. It does not identify who may grant permission for working at competing stores where permission is sought or whether permission may be granted. The evidence disclosed that local store managers have some discretion whether to escalate the matter to Labour Relations. The Policy does not specify the circumstances under which they must refuse permission, or the circumstances under which they must refer the matter to the Labour Relations Department.

The Arbitrator made no findings about the division of responsibilities between the local managers and the Labour Relations Department. [ 108 ] Lack of training for managers in their role and reporting responsibilities may well give rise to concerns over consistency of enforcement. But in this case, I was not pointed to any admissions by any manager that they lacked training or were not properly

informed on when to escalate a matter to the Labour Relations Department. I was not shown any evidence from any of Safeway’s personnel that suggested they did not have training or guidelines about managerial roles and reporting structures. [ 109 ] To the contrary, there was evidence mentioned in the Arbitration Decision that suggested the Policy was actively enforced. The Arbitrator mentioned the testimony of two managers. One was Mr. Polini’s manager, who said he took the issue to the Human Resources Department.

The other was the Edmonton employee’s manager, who said had he known the true facts he would have escalated the matter to his District Manager. [ 110 ] A previous manager and close family friend of the Edmonton employee permitted him to work for the Edmonton Italian Centre store at a different time (see paras 25 - 26 above).

That does not show that the Policy was not consistently enforced by Safeway, particularly as that manager did not testify and I was not provided any evidence to show that the Edmonton store of the past was as close a competitor to Safeway as was the new Calgary Italian Centre store of the present. Consistent enforcement does not require perfect enforcement, and it was up to the Arbitrator to decide on all the evidence whether there was any concern about lack of enforcement.

The Union is simply attempting to reargue the evidence, without showing unreasonable error. [ 111 ] Similarly, no evidence was cited to me to suggest the Labour Relations Department was not properly trained to administer the Policy. The evidence of the Labour Relations Department witnesses as described in the Arbitration Decision suggests they were well versed in the enforcement of the Policy. [ 112 ] The Union argues the Arbitrator placed the burden on the Union to disprove consistency of enforcement. I do not read the Arbitration Decision as saying that.

The record of what exactly may have been argued and the content of all the evidence is fragmented, as I do not have a transcript of the arbitration.

I am not persuaded by the submissions that an expert labour arbitrator overlooked management’s obligation to satisfy her that the Policy was consistently enforced, or did not have sufficient evidence from the store management, Human Resources, and Labour Relations witnesses to satisfy herself that there was no genuine issue over consistency of enforcement of the Policy. [ 113 ] The Union provided two examples in its argument to the Arbitrator that the Policy was not consistently enforced. These were the matters of the Edmonton employee and Safeway employees working at Walmart. The Arbitrator rejected these.

Her reasons were cogent and do not indicate unreasonableness. [ 114 ] The Union further submits the Arbitrator ought to have mentioned, in her analysis, the fact that there is risk that any Safeway employee working at Walmart could disclose confidential information, because all Walmart staff (including Safeway employees knowing confidential information) attend Walmart morning meetings where marketing, sales and other activities are discussed. [ 115 ] I do not agree with the Union that the Arbitrator did not deal with this in her analysis.

She recorded the evidence of the morning meetings in her recitation of the facts and evidence. She returned to the issue in her analysis: The Union advances another argument however. It says that the policy has not been enforced consistently. They advance two arguments in that regard. The first is that Safeway has allowed employees to work at Walmart and would permit that to occur in the future. Safeway offered a reasonable explanation. It will allow employees to work for direct competitors as long as the employee is not working in the same department (i.e. as a grocery clerk).

This is so even though the employee might have access to confidential information because Safeway assesses the risk of confidential information being shared in those circumstances is one that they are prepared to bear . That represents a reasonable balancing of the interest of Safeway and its employees. [Underlining added] [ 116 ] This analysis must be read with the rest of the Arbitration Decision.

There is nothing unreasonable in the Arbitrator upholding a limited Policy that she found balances Safeway’s interests in protecting its commercial interests and the employees’ interests in having flexibility to earn their livelihood. The fact Safeway might be able to successfully impose an even wider policy does not make its decision to narrow its Policy unreasonable. [ 117 ] The Union also submits the Policy is unreasonable because Safeway failed to make a fact specific assessment of Mr.

Polini’s situation before terminating him, and that it was only after the fact and for the purpose of the arbitration that Safeway provided some evidence in support of its claim that Mr. Polini was in a conflict (Union’s written brief, at para 40 - 42). Thus there was no proper risk based analysis, if any at all ( ibid , at para 40).

The Union says that hence “the Arbitrator’s finding that the saving grace for the Policy is that it is only applied after a careful risk-based assessment is untenable and what remains is her finding of an overly broad prohibition that fails the KVP test.” [ 118 ] I do not read the Arbitrator’s reasons as a finding that there was no risk based analysis before Mr. Polini was terminated. The Arbitrator found that Safeway did conduct an analysis before terminating Mr. Polini (see para 46 above). Ms. Ahrends decided to terminate Mr. Polini, relying on information from others. Ms.

Cole testified she was familiar with Italian Centre and did some investigation into it when it opened. The Union has not demonstrated that there was any evidence to the effect that Safeway did not check into Italian Centre before deciding to terminate Mr. Polini or that the Labour Relations Department did not address Mr. Polini’s new position and role at Italian Centre. [ 119 ] Safeway might have jumped the gun in its conclusion about Mr. Polini’s role at Italian Centre – the Arbitrator said Ms.

Ahrends made assumptions about his role and the Arbitrator does not mention evidence that anyone at Safeway actually asked Mr. Polini about his role at Italian Centre. Safeway’s factual conclusion about Mr. Polini’s new job was that he had the same job positions (general clerk). The Arbitrator did not say that Safeway investigated what the job position meant at Italian Centre. It might be that Safeway’s investigation into roles was not adequate before termination. [ 120 ] The Arbitrator heard evidence about discussions among Mr. Powrie, Mr.

Polini and Union representatives with respect to the new job or the conflict issue. She concluded Safeway reasonably applied the Policy to Mr. Polini, and Safeway’s conclusion that Mr. Polini had the same job position at both stores was enough to support reasonableness.

[ 121 ] The Arbitrator is an expert in labour relations, and able to address such things as required investigations and industry terminology. I am obliged to defer to her conclusions in accordance with the standard of review principles described above. The Union must persuade me the Arbitrator acted unreasonably. There is not enough in the materials provided to me to question the Arbitrator’s conclusion that Safeway’s conduct was reasonable. I do not see how Safeway’s reasonable conduct was evidence of inconsistent enforcement. As mentioned in

Part IV above, the Arbitrator does not have to mention and refute each point made by the parties or make an explicit finding on each constituent element, however subordinate, leading to her final conclusion ( Newfoundland and Labrador Nurses’ Union , at para 16). [ 122 ] Alternatively, it might be that the Union did not actually make this point to the Arbitrator in the context of its consistency of enforcement argument. It is possible the Arbitrator made an implicit decision that Safeway’s review of Mr. Polini’s circumstances though somewhat flawed, was not evidence of inconsistent enforcement.

That would not be unreasonable. Respectful attention to a labour arbitrator’s decision includes not only the reasons given, but also the reasons that could be given in support of a decision ( ibid at para 12). It follows that if there was an implicit conclusion along the path of the reasons, and there was a reasonable basis for it in the sense that it falls within a range of possible, acceptable outcomes which are defensible in respect of the facts and law, the Court should not interfere ( Alberta (Information and Privacy Commissioner) v.

Alberta Teachers’ Association , 2011 SCC 61 , [2011] 3 SCR 654 at para 52 - 55 ). [ 123 ] I was not provided any transcript or note of the evidence other than what appears in the Arbitration Decision. The Arbitrator’s function was to weigh and assess the evidence, including whether the evidence satisfied her that the Policy was consistently applied. If there were errors or omissions by Safeway in applying it, it was up to her to decide if they were such as to justify concluding the Policy was not consistently applied.

I find it difficult to believe that an experienced labour arbitrator would forget to consider the evidence of Safeway’s investigation in the context of the parties’ respective submissions. Safeway’s conclusions were, after all, considered by her to be a key issue and part of the inferences of fact that she said were hotly debated. No transcript, reasons or logic flaws indicate she erred. The Union has not demonstrated that the Arbitrator erred in her assessments and deliberations relating to consistency of enforcement. [ 124 ] The Union also impugns the last paragraph on p 12 of the Arbitrator’s reasons.

This was part of the Arbitrator’s general introduction to the issues facing part-time employees of Safeway. She said Mr. Polini’s change from full time employment to part time employment may be relevant in the risk based assessment under the Policy. She does not mention that point again and does not find it is material in Mr. Polini’s case. There is nothing to suggest it tainted her reasoning, even assuming it meant anything other than that she was prepared to have an open mind in deliberating on this case – and there is no doubt that she did so with an open mind. [ 125 ] In

summary, the Union bears the burden to persuade me that the Arbitrator committed unreasonable errors in respect of her KVP assessment. There is nothing to suggest she misconstrued, ignored or did not understand any of the evidence or arguments.

There is no indication that her conclusions on KVP reasonableness are unreasonable or tainted by any reviewable error. (iv) Whether the Arbitrator erred in not finding a breach of the Policy [ 126 ] The Union argues there is no evidence to support the conclusion that Italian Centre was a direct competitor. [ 127 ] As stated earlier, I see no reversible error in the Arbitrator’s conclusion that by the usual yardstick, the stores were direct competitors. [ 128 ] Italian Centre was located in a former Sobey’s location that was the size of a small Safeway store.

The opening of the Italian Centre resulted in a substantial reduction of revenue and foot traffic at a nearby Safeway store. Italian Centre sold many of the same products as Safeway. One witness said Safeway sold all the products on Italian Centre’s website. The Arbitrator had evidence that showed Italian Centre was not only a niche vendor of imported products. The Arbitrator heard cross-examination about the products for sale in the Calgary Italian Centre from a witness who claimed that they were not competitors. [ 129 ] The Union has not articulated a basis to call into question the Arbitrator’s conclusion.

Weighing the evidence, including what weight to assign to general observations of reduced revenue and traffic or whether part of Safeway’s customer base includes purchasers of niche products, is the Arbitrator’s function. The Union has not shown any unreasonableness in the Arbitrator’s weighing and assessing the witness’ evidence concerning the competitive aspects of the stores. Her reasons are sensible and cogent. [ 130 ] The Union argues there is no evidence to support an actual or realistic risk of harm through disclosure of confidential information. [ 131 ] The potential for harm is a matter of inference.

Inferences are also assessed on the reasonableness standard. The Arbitrator discussed some precedents from previous grievance arbitrations suggesting that an employment restriction similar to Safeway’s limitation on the written scope of its Policy could be reasonable. [ 132 ] The Arbitrator found that Safeway reasonably concluded that Mr. Polini had the same positions at both jobs and there was sufficient risk of information disclosure. However, as stated in

Part V (ii) above, the findings concerning similarity of functions and risk of information disclosure cannot stand given the Arbitrator’s error in the standard for assessment of the evidence. The Arbitrator has to make her own assessment of the evidence, including not only Mr. Polini’s job titles or positions but his job functions . I have set aside these findings on that basis, and the present argument adds nothing to it. (

v) Whether the Arbitrator erred in not considering a lesser sanction [ 133 ] The Union says that the Arbitrator ought to have considered whether a lesser sanction should have been substituted. [ 134 ] The Arbitrator has power to substitute a lesser sanction ( Labour Relations Code , subsection 142(2)) and where the circumstances do not amount to just cause for termination the Arbitrator ought to substitute a lesser sanction.

[ 135 ] However, the present case seems to have been argued as turning on whether the Policy applied, not whether the sanction was excessive if the Policy applied. The Union acknowledged in oral argument that the point now advanced in this judicial review application was not raised with the Arbitrator. [ 136 ] I would have some concern that Mr. Polini was treated unfairly if he was lulled into changing his status at Safeway and going to work for Italian Centre through Safeway’s delay in providing its position that the Policy applied. There was a conflict in the evidence whether Safeway delayed notifying Mr.

Polini of its concerns. It was not necessary for the Arbitrator to resolve that conflict as arguments of condonation or the like do not appear to have been raised in the Arbitration. [ 137 ] It is not appropriate to deal with this point on the judicial review. First, it is not strictly a legal issue. It is an issue of mixed law and fact that would require additional fact findings, including resolving the conflict in the evidence about when Mr. Polini was first told by Safeway that there was a conflict issue.

Second, the Court does not have the benefit of the Arbitrator’s views in this area, which is within her specialized functions and expertise. Third, permitting the point to be raised on judicial review would undercut the authority of labour arbitrators and draw out the arbitration process. See, generally, Alberta (Information and Privacy Commissioner) v Alberta Teachers’ Association, at paras 23 -

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