This type of ruling is the main reason why employers should not agree to binding arbitration in union contracts. Arbitrators are trained to compromise. They are not bound by rules of evidence, as in a court. Unfortunately, if employers become intransigent about an issue like this, in which these employees were on video drinking out of bottles hidden in paper bags and smoking what looked like home-rolled cigarettes (maybe something other than tobacco?), the NLRB regulations require the employer to pretty much give in or face a violation of not bargaining in good faith. "Good faith" means there must be a compromise, which I suppose in this case is loss of wages for a long time (maybe two years?).
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