Amicus Curiae Brief — Paperworkers v. Misco, Inc.

Supreme Court, US,

No. 86-651 WAR 27 1987

a a

IN THE CLERK

Supreme Court of the United States

OCTOBER TERM, 1986

UNITED PAPERWORKERS INTERNATIONAL UNION,

AFL-CIO AND OUACHITA LOCAL 654, ~

. Petitioners

MIsco, INC.,

Respondent

On Writ of Certiorari to the United States

Court of Appeals for the Fifth Circuit

BRIEF OF THE

NATIONAL ACADEMY OF ARBITRATORS

AS AMICUS CURIAE IN SUPPORT

OF PETITIONERS

DAVID E. FELLER *

Special Counsel

Boalt Hall

Bancroft at Piedmont

Berkeley, CA 94720

(415) 642-0629

Of Counsel: WILLIAM P. MURPHY

JAN VETTER President, National Academy

Boalt Hall of Arbitrators

Berkeley, CA 94720 ‘School of Law .

(415) 642-0821 University of North Carolina

Chapel Hill, North Carolina 27514

(919) 962-4124

Attorneys for the

National Academy of Arbitrators

* Counsel of Record

WILSON - EPes PRINTING Co., INC. - 789-0096 - WASHINGTON, D.C. 20001

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—

TABLE OF CONTENTS

INTEREST AND CONCERN OF THE AMICUS......

SUMMARY OF ARGUMENT .......00...2....2.2...2.:ceccceeseeeeee

FREESE RAU RETA oe ae TS COT

I.

Il.

III.

IV.

Whether Or Not A Court May Refuse To En-

force An Arbitrator’s Award For Reasons of

“Public Policy,” The Decision Below Must Be

ee | ee

Under Agreements Providing For Review Of

The Imposition of Discipline On A “Just Cause”

Standard The Arbitrator Is Authorized To

Consider Questions Of Industrial Justice........

In Determining Whether Standards of Indus-

trial Justice Have Been Met, Arbitrators Are

Authorized To And Do Decide Questions Of

Public Policy And,-In Particular, Public Pol-

Se I I ec eeteenesonenion

A Court Should Not Set Aside An Arbitrator’s

Decision As To The Justice Of Discipline On

Public Policy Grounds Unless The Remedy

Prescribed By The Arbitrator Would Require A

EER TRS ee a eR

Federal Labor Policy Requires A Strong Re-

Affirmation of the Rule Of Enterprise Wheel

& Car And The Rejection Of An Expansive

Ts stceentaemmtenensaiibabinnninadinam

ee intiammepednenemuceninnincion

15

20

26

30

ii

TABLE OF AUTHORITIES

Cases Page

Alexander v. Gardner-Denver Co., 415 U.S. 36

|) | | ee ee 10

Amalgamated Meat Cutters v. Great Western

Food Co., 712 F.2d 122 (5th Cir. 1983) -........... 14

American Postal Workers v. United States Postal

Service, 682 F.2d 1280 (9th Cir. 1982) -.............. 22

A.T.&T. Technologies, Inc. v. Communications

Workers, USS. , 106 Sup. Ct. 415

0) | Eee eR ee 2,9

Black v. Cutter Laboratories, 43 Cal.2d 788 (1955),

cert. dismissed, 352 U.S. 859 (1956) -................ 25

Botany Industries v. N.Y. Joint Board, 375 F.

6 83 8 Se 22

Boys Markets v. Retail Clerks, 398 U.S. 235

CID aceceercencsienseseesentnocseniensenesaanenee 26, 27

Buffalo Forge Co. v. United Steelworkers, 428

UB. SOF CAGED 2. cesinciotinnin 27

E.J. DuPont Co. v. Grasselli Employees Associa-

tion, 790 F.2d 611 (7th Cir. 1986), cert. denied,

2) & eee eee ee 24

Evans Products Co. v. Millmen’s Union No. 550,

F 159 Cal.App.3d 815, 205 Cal.Rptr. 731 (1984). 21

Gateway Coal Co. v. United Mine Workers, 466

ep 8) 6: ft eo eee 23

Gateway Coal Co. v. United Mineworkers, 414

UB, BEB CIGD enecenccncessensteineie 22, 27

General Warehousemen v. Standard Brands, 579

F.2d 1282 (5th Cir., 1978), cert. den., 441 U.S.

GS CCID kncesSencececasceccennssnnnteiicincnneaneeeeee 21

Meat Cutters Local No. P-1236 v. Jones Dairy

Farm, 680 F.2d 1142 (7th Cir. 1982) ................. 25

Muschany v. United States, 324 U.S. 49, 66

EE vewsnnsetensasnsiiionamebandinindimmdaaiain 25

Republic Steel Co. v. " Maddoz, 379 U.S. 650

| Ne 28

Steelworkers v. Ameriwan Mfg. Co., 363 U.S.

eg ee 9

Steelworkers v. Enterprise Wheel & Car Corp.,

SED UE. GE CUD ciccccieanl snandeie passim

iii

TABLE OF AUTHORITIES—Continued

Page

Steelworkers v. Warrior & Gulf Navigation Co.,

EES See 9, 23

Teamsters Local 174 v. Lucas Flour Co., 369 U.S.

ES eT 26, 27

Teamsters Local 249 v. Consolidated Freightways,

464 F. Supp. 2699 (W.D.Pa. 1979) .................... 22

United States Postal Service v. American Postal

Workers Union, 736 F.2d 822 (ist Cir. 1984)... 14

Vaca v. Sipes, 386 U.S. 171 (1967) —....................... 28

W.R. Grace & Co. v. Rubber Workers Local 759,

RS . &, 25

Arbitration Decisions

Armstreng Rubber Co., 77 LA 775 (A.M. Koven,

SED - citunntibiidinn F 19

Asarco, Inc., 76 LA 163, (HE. “Grooms, 981). 16

Atchison, Topeka & Santa Fe Ry. Co., 87 LA 972

CL FE 19

Cities Service Co., 77 LA 1180 (C.C. Brisco,

1982) . ot Te SET 16

Consolidation Coal Co., 87 LA 729 (R. Hon,

re. ceentenemunsiinenennntoes 16

Evans Products Co., 70 LA 526 (Feller, 1978) _..... 21

Indianapolis Power and Light Co., 87 LA 826

I eemeen 16

Lanter Co., 87 LA 1300 (J.R. Thornell, 1967) ....... 18

Morgan Adhesives, 87 LA 1039 (R.I. Abrams,

ee 19

Riley Stoker Corp., 7 LA 764, 7° (H. Platt,

Se a 13

Signal Delivery Service, Inc., 86 LA 15 (E.M.

Weis, 1985) al 19

Springfield Mass Transit District, 80 LA. 193 (Vv.

REE 19

Washington Metropolitan Area Transit Authority,

82 LA 150 (H.N. Bernhardt, 1983) —.......... ae) 19

Wayne State University, 87 LA 953 (N. Lipson,

ea A a ae ee 18

iv

TABLE OF AUTHORITIES—Continued

Collective Bargaining Agreements

Bureau of National Affairs, Collective Bargaining

Negotiations and Contracts (Looseleaf, 1987) ....

Bureau of National Affairs, Labor Relations Cumu-

gg SEE CE SRI

Litton Industrial Products, Inc. and Machinists

(exp. TIPU . <ntevisuncqnansttivceniqnininerennsieniatndensmbanpetons

ee ppsinereoaniaentnicinesidtinieiindoeiaasabieuaadiiemtiatese

Statutes and Regulations

Executive Order 12564, 51 Fed. Reg. 92589 (Sept.

ET Le wien eee

Labor Management Relations Act, Section 301,

NE I Cee ve a et ee

Meat Inspection Act, 21 U.S.C. $§ 602 ff —..............

IID cinnsniinecesdhincshidhaliiedibnnsiealhdtietcipendianessninctdpentell

Other Authorities

Blumrosen, Public Policy Considerations in Labor

Arbitration Cases, 14 Rutgers L. Rev. 217

Each 2 aR Re SE er

Elkouri & Elkouri, How Arbitration Works (4th

Ne A RRR - a

Fairweather, Practice and Procedure in Labor Ar-

bitration (2nd Ed. 1983) 303 2.0.00...

Feller, The Impact of External Law, in The Fu-

ture of Labor Arbitration in America 83, 90 ff.

ARR SAE 1 CS Re

Jennings, Sheffield and Walters, The Arbitration

of Discharge Cases: A Forty-Year Perspective,

38 Lab. L.J. 33, 39-40 (1987) . oes

Jones, The Role of Arbitration in n State end Na-

tional Laber Policy, in Arbitration and the

Public Interest, Proceedings of the 24th Annual

Meeting, National Academy of Arbitrators

Es Deere eee

Kadish, The Criminal Law and Industrial Dis-

cipline As Sanctioning Systems, in Labor Ar-

bitration Perspectives and Problems, Proceed-

ings of the Seventeenth Annual Meeting, Na-

tional Academy of Arbitrators (1964) 125.......

Page

“11, 14

21

12

15

v

TABLE OF AUTHORITIES—Continued

Morris, Twenty Years of Trilogy: A Celebration,

in Decisional Thinking of Arbitrators and

Judges, Proceedings of Thirty-Third Annual

Meeting, National Academy of Arbitrators 331,

sl cetciennes

Perez-Reyes, Guiseppi, Mason and Davis; Passive

Inhalation of Marijuana Smoke and Urinary

Excretion of Cannabinoids, 34 Clinical Phar-

macology and Therapeutics, No. 1, p. 36

GE. cocthntebddnaiie-~ainatinnin: ei teenie SAL AS ds

St. Antoine, Judicial Review of Labor Arbitra-

tion Awards: A Second Look at Enterprise

Wheel and Its Progeny, in Arbitration—1977,

Proceedings of the Thirtieth Annual Meeting,

National Academy of Arbitrators 29, 30

EE SEE ELE RITE IS A oe MO ROT

T.S. Denenberg and R.V. Denenberg, Alcohol and

Drugs: Issues in the Work Place (1983)

Page

20

IN THE

Supreme Court of the United States

OCTOBER TERM, 1986

No. 86-651

UNITED PAPERWORKERS INTERNATIONAL UNION,

AFL-CIO AND OUACHITA LOCAL 654,

Petitioners

Vv.

MIsco, INC.,

Respondent

On Writ of Certiorari to the United States

Court of Appeals for the Fifth Circuit

BRIEF OF THE

NATIONAL ACADEMY OF ARBITRATORS

AS AMICUS CURIAE IN SUPPORT

OF PETITIONERS

INTEREST AND CONCERN OF THE AMICUS

The National Academy of Arbitrators was founded in

September 1947. Its membership is limited to those who

have substantial and current experience as impartial ar-

bitrators of labor-management disputes so as to reflect

general acceptability by the parties, or those with limited

but current experience in arbitration who have attained

2

general recognition through scholarly publication or other

activities as impartial authorities on labor-management

relationships. Its principle purposes are “to establish and

foster high standards and competence among those en-

gaged in the arbitration of labor-management disputes on

a professional basis; to adopt canons of ethics to govern

the conduct of arbitrators; te promote the study and

-understanding of the arbitration of labor-management

disputes.” It is co-author, with the American Arbitration

Association and the Federal Mediation and Conciliation

Service, of the Code of Professional Responsibility for

arbitrators of Labor-Management Disputes. As of Sep-

tember 1985 the membership of the Academy totalled

approximately 637. The annual meetings of the Acacemy

are the occasion for the presentation of papers by schol-

ars, arbitrators and representatives of labor and manage-

ment dealing with the nature of the arbitration process,

its relationship to the law and the conduct of labor-

management relationships in general. The proceedings of

the annual meetings are published by the Bureau of Na-

tional Affairs and constitute the most authoritative col-

lection in existence of the materials on the arbitration

process.

This is the second amicus curiae brief filed by the

Academy in this Court. The first was in A.7.&T. Tech-

nologies, Inc. v. Communications Workers of America,

October Term, 1985, No. 84-1913, decided April 7, 1986.

As in that case the brief filed, with the consent of the

parties, because the Academy believes that if the law is

to be involved in the arbitration process, as-Congress in

effect mandated by enacting Section 301 of the Labor

Management Relations Act of 1947 (29 U.S.C. § 185),

that involvement should serve to effectuate the purposes

for which unions and employers have established that

process. The course of this Court’s decisions with respect_

to arbitration have, we believe, served that purpose. Be-

cause this case has the potential for disturbing the regime

3

established by the prior decisions of the Court, the Acad-

emy has undertaken to file this brief. The importance of

the case is not the result for the particular parties in-

volved. The importance, rather, is in the doctrine an-

nounced in the case as it affects the relationship between

the courts and the arbitration process in the countless

other cases which may follow in the future. It is our hope

that this brief will assist the Court in understanding the

context in which cases such as the present one arise and

in announcing doctrine which will support rather than

undermine a process that both unions and employers have

found to be desirable.

SUMMARY OF ARGUMENT

In order to reach the conclusion that public policy

dictated reversal of the arbitrator’s decision ordering re-

instatement in this case the court below first had to re-

verse both his interpretation of the collective bargaining

agreement and his findings of fact, in violation of the

principles set forth by this Court in Steelworkers v.

Enterprise Wheel and Car Corp., 363 U.S. 593 (1960).

There was no evidence that the grievant had operated

dangerous machinery under the influence of drugs or alco-

hol. The court could have concluded that the public policy

against such operation required vacation of the arbi-

trator’s award only by making a totally unwarranted

substitution of its own belief or beliefs for the arbitrator’s

conclusion on the facts.

Even assuming that the court below was justified in

so doing, and that the grievant had violated the rule

against the use of marijuana on company property, the

court should not have reversed on public policy grounds

the arbitrator’s order of reinstatement. Analysis of that

question requires a description of the arbitrator’s role in

disciplinary cases. It is true that the arbitrator is author-

ized only to interpret and apply the express or implied

provisions of the agreement. But where an agreement

4

provides for review of the discipline imposed by the em-

ployer, the arbitrator is usually given authority to decide

whether the discipline imposed was “just.”

The first issue in any discharge case is whether the

discharged employee has committed the offense with

which he has been charged. Unless the agreement other-

wise provides, however, a finding of “guilty” does not

end the matter. In the usual case, as in this case, the

agreement provides that the employer’s power to discip-

line or discharge may be exercised only for ‘“‘just cause.”

And in the determination of that question, the arbitrator

in the usual case is empowered to reduce the penalty and

provide an appropriate remedy.

In determining the justice of the discipline imposed by

an employer, as well as in prescribing the appropriate

remedy where there is not, the arbitrator is authorized

by the agreement to decide any questions of public policy

relating to those issues. This is particularly true with

respect to issues of public safety. Examination of arbi-

trators’ decisions in disciplinary cases shows that arbitra-

tors not only have the authority to rule on public policy

questions in such cases but exercise it.

Since the parties have vested in the arbitrator the

authority to consider public policy in determining whether

there was “just cause,” and in providing a remedy, the

courts should not entertain claims of the losing party

that the arbitrator has not made the appropriate judg-

ment on the public policy issue unless the remedy pre-

scribed by the arbitrator would require a violation of law.

The arbitrator’s decision is, as it were, read into the

agreement as if it were set out in the agreement in so

many words. A court should not refuse to enforce the

agreement as so read unless enforcement would require a

violation of law. The same principle may, but need not

necessarily, be applied in other cases. Even in those other

5

cases, however, the rule announced by this Court in W.R.

Grace and Co. v. Rubber Workers Local 759, 461 U.S.

757, 766 (1983), should control, and the expansive use of

public policy represented by the decision of the court below

should not be permitted.

This result is dictated by the overriding federal policy

expressed in the whole structure of law which this Court

has built in the interest of encouraging the use of arbi-

tration rather than the strike as a method of resolving

disputes arising during the term of a collective bargain-

ing agreement. The rule of Enterprise Wheel and Car is

an essential part of that structure. As this case illus-

trates, there is a strong temptation for courts to reach

out, on one ground or another, to set aside arbitration

awards that they consider wrongly decided. That temp-

tation is resisted in most cases. But the proliferation of

litigation in which the validity of'an arbitrator’s award

is challenged shows that even the few cases in which the

challenge is successful serve as beacons encouraging liti-

gation that, in the end; can only undercut achievement of

the objectives of speed, flexibility, and finality that in-

duce employers and unions to choose arbitration rather

than the strike as the terminal facility for the resolution

of disputes. This court should, therefore, in the strongest

terms reaffirm the principles of finality expressed in

Enterprise Wheel and Car.

ARGUMENT

I. Whether or Not a Court May Refuse to Enforce an

Arbitrator’s Award for Reasons of “Public Policy,” the

Decision Below Must Be Reversed

There can be little doubt about the proper end result

in this case. Even assuming that the question posed in

the petition for certiorari—“Whether a federa] court may

refuse to enforce an arbitration award [not in violation

of law] ... on the ground that enforcement of the award

would contravene public policy. . . .”.—is answered in the

6

affirmative, the decision of the Court of Appeals should

be reversed.

The reason is simply that the Court of Appeals, al-

though it purported to do so, plainly failed to adhere

to the principles of Steelworkers v. Enterprise Wheel &

Car Corp., 363 U.S. 593 (1960). The court said that

its refusal to enforce the arbitrator’s award ordering re-

instatement was based on a public policy concern for

safety. But no such question of public policy even pre-

sented itself unless the court first invaded the arbitrator’s

domain and reversed both his interpretation and applica-

tion of the collective bargaining agreement and his find-

ings of fact.

The arbitrator in this case is not a lawyer and his

opinion in this case may not be a model of judicial crafts-

manship. But as this Court has said, there is no require-

ment in law that an arbitrator issue any opinion and if

one is issued “a mere ambiguity in the opinion accom-

panying the award ... is not a reason for refusing to

enforce the award.”' In this case there is no ambiguity.

Although not in the order one might desire, and with

some unnecessary dictum, the opinion does show the ulti-

mate finding upon which the arbitrator rested his award.

He found that the evidence preperly before him—consist-

ing principally of the grievant’s apprehension in the rear

seat of a car not his own in which a lit marijuana

cigarette was in the front seat ashtray after the two

occupants of that front seat had departed—was not suffi-

cient to prove the grievant. guilty of the offense for which

he was discharged: smoking marijuana. The fact that

an unusable amouat of marijuana residue was later

found in the grievant’s own car, a fact which was only

discovered later and first adduced by the company at the

time of the hearing, the arbitrator ruled to be irrelevant.

In so ruling the arbitrator followed the usual practice

in arbitration. The general rule is stated by the leading

1363 U.S. at 593.

7

commentators on arbitration practice: “Where a dis-

charge occurs, its propriety must be determined from an

analysis of the cause for the discharge, and evidence of

misconduct discovered after the discharge cannot be pre-

sented to justify the discharge action.”* Or, as stated

in Elkouri & Elkouri,* “Even without . . . specific con-

tractual provision, arbitrators have held that discharge,

to use the words of arbitrator Paul N. Gunthrie, ‘must

stand or fall upon the reason given at the time of dis-

charge;’ other reasons may not be added when the case

reaches arbitration.” These authors also indicate that

there are circumstances in which some arbitrators have

taken into account post-discharge justifications based on

evidence obtained after the discharge. But clearly the

arbitrator was exercising the judgment which the parties

had vested in him in determining that under this collec-

tive bargaining agreement evidence of a violation of the

rule in question different from the one for which the

grievant was discharged should not be taken into account

in determining whether the employer had just cause

when it discharged him.

Even if we assume that the court properly reversed the

arbitrator for what it called a “narrow focus on [the

grievant’s] procedural rights,” there still was no public

policy question. If the arbitrator should have considered

the after-discovered evidence of the marijuana gleanings

in the grievant’s car, then he could have concluded that

the grievant had technically violated the rule against

bringing a controlled substance onto plant premises. But

even so, that would not call into play any public policy

“against the operation of dangerous machinery by per-

sons under the influence of drugs or alcohol.” It simply

dooes not follow from the fact that there were marijuana

gleanings in the grievant’s car that he had operated

machinery under the influence of marijuana.

2 Fairweather, Practice and Procedure in Labor Arbitration (2nd

ed. 1983) 303.

8 How Arbitration Works (4th ed., 1985) 675-676.

8

This must have been apparent to the Court of Appeals.

Perhaps the court reached the public policy question be-

cause it believed that the grievant had in fact been smok-

ing the marijuana cigarette found in the front seat ash

tray and that he therefore operated dangerous machinery

under its influence. Perhaps the court believed that the

grievant had supplied from his car the marijuana which

his companions then smoked in the second car, thus caus-

ing them to operate dangerous machinery under the in-

fluence of marijuana. Perhaps it believed—-as it inti-

mated in its opinion—that sitting in a car in which

others smoked marijuana caused the grievant to be under

its influence.t Whichever is the case, the court had to

invade the province of the arbitrator in order to reach

the public policy issue. No safety question at all ex-

isted unless the court substituted its own beliefs, for

the arbitrator’s conclusions on the facts in violation of

the direction of this Court in Enterprise Wheel and Car.

As the Court there stated, it is the arbitrator’s judgment

which the parties have bargained for, and that judgment

should be sustained unless it can be shown that the ar-

bitrator attempted to dispense his own brand of indus-

trial justice instead of applying the standards which he

found in the collective bargaining agreement.

II. Under Agreements Providing for Review of the Imposi-

tion of Discipline on a “Just Cause” Standard the

Arbitrator Is Authorized to Consider Questions of In-

dustrial Justice

Although this case can be disposed on the foregoing

basis, any such decision would not resolve the conflict of

circuits that presumably led this Court to grant certio-

rari. We therefore now address ourselves to that ques-

tion: to what extent and under what circumstances, may

*If so, the belief is contrary to the scientific evidence. See

Perez-Reyes, Guiseppi, Mason and Davis, Passive Inhalation of

Marijuana Smoke and Urinary Excretion of Cannabinoids, 34 Clin-

ical Pharmacology and Therapeutics No. 1, p. 36 (i983).

9

a court set aside an arbitrator’s award in a discharge

case on the ground that enforcement would violate public

policy? In order to do so we assume, hypothetically, that

the arbitrator had properly found that the grievant had

violated the company rule but nevertheless ordered his

reinstatement, although there is no showing that he would

have done so or, if he would, what conditions he might

have placed on the reinstatement order.

Resolution of the question thus posed requires careful

consideration of the respective roles of courts and arbi-

trators in actions subject to Section 301 of the Labor

Management Relations Act of 1947. This Court in

A.T.&.T. Technologies® recently re-addressed one aspect

of that relationship—the role of the court in determining

whether an employer should be required to arbitrate a

claim that the collective agreement has been violated.

The question presented in this case concerns the role of

the court at the end of the arbitration process when the

award has been issued.

The two are closely related. In Warrior & Gulf* and

American Manufacturing * this Court made it clear, and

reiterated in A.7.&.T. Technologies, that if the claim is

that a party has violated the collective bargaining agree-

ment and the arbitration provision is susceptible of a

construction making a claim of violation of the agree-

ment subject to arbitration the court should order the

other party to arbitrate. It follows that when arbitration

is ordered, or when the obligation to arbitrate is com-

plied with without the necessity of an order, the arbi-

trator is confined to determination of the questions com-

prised within the agreement to arbitrate. In the typical

5A.T.&T. Technologies v. Communications Workers,

, 106 S.Ct. 1415 (1986).

6 Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574

(1960).

7 Steelworkers v. American Mfg. Co., 363 U.S. 564 (1960).

US.

10

case, as in the present case, those questions are whether

the employer has complied with the express or implied

provisions of the collective bargaining agreement and, if

not, what is the appropriate remedy. As this Court re-

stated the arbitrator’s role in Alexander v. Gardner-

Denver Co., 415 U.S. 36, 53 (1974), citing Enterprise

Wheel & Car:

“As the proctor of the bargain, the arbitrator’s task

is to effectuate the intent of the parties. His source

of authority is the collective-bargaining agreement,

and he must interpret and apply that agreement in

accordance with the ‘industrial common law of the

shop’ and the various needs and desires of the parties.

The arbitrator, however, has no general authority to

invoke public laws that conflict with the bargain be-

tween the parties .... If an arbitratal decision is

based ‘solely on the arbitrator’s view of the require-

ments of enacted legislation,’ rather than on an in-

terpretation of the collective-bargaining agreement,

the arbitrator has ‘exceeded the scope of his submis-

sion,’ and the award will not be enforced.”

What is true of a decision of an arbitrator based on

the requirements of enacted legislation is equally true of

one based on public policy. The general rule is that an

arbitrator has no authority to award relief to a grievant

that is not expressly or impliedly required by the col-

lective agreement because the arbitrator believes it to be

required by public policy or, on the other hand, to deny

relief which he finds that the agreement mandates be-

cause of considerations of public policy. In so doing the

arbitrator would be “dispensing his own brand of in-

dustrial justice.”

As with all general rules, however, there are excep-

tions. The collective agreement may itself require the

arbitrator to consider and decide “the requirements of

enacted legislation.” A typical example is an agreement

provision that the employer will accord to returning serv-

icemen all of the seniority rights specified in the ap-

11

plicable service legislation.* Another is a provision that

the employer will abide by the nondiscrimination provi-

sions of Title VII of the Civil Rights Act.°

The collective agreement may also, either expressly or

impliedly, authorize the arbitrator to deal with questions

of industrial justice. And, indeed, most agreements in

fact do so in connection with discipline and discharge

cases. Even those agreements that do specify grounds

for discipline or discharge, either in the agreement itself

or in rules which the agreement authorizes the employer

to promulgate, rarely provide for automatic and uniform

penalties. There are agreements that do. Some agree-

ments, for example, provide for graduated penalties for

specific numbers of unexcused absences or garnishments

with discharge as the final and automatic penalty for a

specified number in a given period.” Similarly, an agree-

ment.may provide that engaging in a strike in violation

of the agreement is ground for discharge and that, if

the penalty is contested, the arbitrator may only consider

whether the disciplined employee in fact engaged in the

prohibited conduct."

The usual agreement, however, does not so provide but

rather specifies that an employee may be discharged only

for “just cause,” or “proper cause” or “sufficient cause.”’

And it is just in such cases that the conflict in the cir-

cuits which brought this case to the Court has arisen.

The precise question upon which the courts of appeals

have differed is whether, and under what circumstances,

8 Agreement between United States Steel Corp. and Steelworkers,

Section 15A (exp. 8/86) reprinted in BNA, Collective Bargaining

Negotiations and Contracts (hereinafter CBNC) 27:48.

® See the provisions reported in CBNC 95:482.

10 See the provisions reported in CBNC 40:13 and 40:2) |

11 Agreement between Litton Industrial Products, Inc. and Ma-

chinists (exp. 6/83) reported in CBNC 77:277.

12

a court can refuse to enforce an arbitrator’s decision

that a discharge was not for “just cause” on the ground

that the decision is contrary to public policy. More de-

tailed analysis of the arbitrator’s function in discharge

cases is, we believe, the necessary predicate for resolu-

tion of that question.

As former dean Sanford Kadish argued in an address

to the Academy in 1964, the issues in a disciplinary case

are roughly analogous to those posed in criminal trials.”

The first issue is whether there is satisfactory proof that

the disciplined employee committed the offense for which

he was discharged. This is a factual question on which

arbitrators unanimously take the position that the em-

ployer has the burden of proof, although they differ as

to the weight of that burden. In some cases arbitrators

have said that proof in the case of a discharge must be

beyond reasonable doubt, in others the standard is stated

to be clear and convincing proof, in yet others it is said

to be preponderance of the evidence.“ In any event, if

the arbitrator finds, on whatever basis, that the em-

ployer has not met its burden of proof, the discharge or

discipline must be set aside and the employee made

whole.

Once the arbitrator finds that the employee committed

the offense for which he was disciplined, there are addi-

tional issues. Since the arbitrator’s jurisdiction is that

prescribed by the agreement, he must next decide whether

the agreement, either explicitly or as consistently con-

strued by the parties, provides a mandatory penalty or

12 Kadish, The Criminal Law and Industrial Discipline As Sanc-

tioning Systems, in Labor Arbitration Perspectives and Problems,

Proceedings of the Seventeenth Annual Meeting, National Academy

of Arbitrators (1964) 125.

18 See Jennings, Sheffield and Walters, The Arbitration of Di.-

charge Cases: A Forty-Year Perspective, 38 Lab.L.J. 38, 39-40

(1987).

13

that the employer’s determination as to penalty is un-

reviewable. If so, the case is ended. But in the usual

case, as in this case, the agreement provides that the em-

ployer’s power to discipline or discharge may be exercised

only for “just,” or “proper” or “sufficient” cause.

The arbitrator’s function under such an agreement was

described in a decision 40 years ago by Harry Platt, an

arbitrator who subsequently became president of the Na-

tional Academy, in these words:

“Tt is ordinarily the function of an Arbitrator in

interpreting a contract provision which requires “suf-

ficient cause” as a condition precedent to discharge

not only to determine whether the employee involved

is guilty of wrungdoing and, if so, to confirm che

employer’s right to discipline where its exercise is

essential to the objective of efficiency, but also to

safeguard the interests of the discharged employee

by making reasonably sure that the causes for dis-

charge were just and equitable and such as would

appeal to reasonable and fair-minded persons as

warranting discharge. To be sure, no standards

exist to aid an Arbitrator in finding a conclusive

answer to such a question a..* therefore, perhaps

the best he can do is to decide wha: .. reasonable man,

mindful of the habits and customs of industrial life

and of the standards »f justice and fair dealing

prevalent in the community ought to have done under

similar circumstances and in that light to decide

whether the conduct of the discharged employee was

defensible and the disciplinary penalty just.” *

14 Although unnecessary to his ultimate decision that the grievant

did not commit the offense charged, the arbitrator in this case

addressed this question in his opinion. Referring to it as a ques-

tion of whether Rule II.1 called for “immediate discharge’ he

concluded that it did not since that rule was included without

differentiation with a rule prohibiting reading on duty, clearly not

one requiring mandatory discharge. App.Pet.Cert. 45a.

15 Riley Stoker Corp., 7 LA 764, 767 (H. Platt, 1947).

14

In addressing these questions, the arbitrator is, of

course, not making the initial determination. That right

is given to the employer. The arbitrator’s function is to

decide whether in exercising that right the employer has

satisfied the contractual standard. If the arbitrator de-

termines that it has, the case is ended. If he determines

that the employer has not, there remain further issues.

The agreement may provide that the arbitrator has no

authority to modify the discipiine imposed. In that event

the arbitrator cannot substitute his determination as to

the appropriate punishment.”* In the more usual case,

however, the arbitrator is empowered to reduce the pen-

alty if he concludes that the one imposed by the em-

ployer does not meet the contractual standard of justice

or sufficiency. And that raises the third and final ques-

tion: the appropriate remedy. Here again the factors

described by arbitrator Platt are relevant. If the arbi-

trator determines thai a discharge does not meet the

standard of justice or sufficiency, he may reduce the

penalty to a suspension for a specified number of days

or order reinstatement without back pay, thus in effect

imposing a suspension equal to the time elapsed between

the discharge and the date of reinstatement, or impose

conditions on reinstatement.

Thus in Amalgamated Meat Cutters v. Great Western

Food Co., ‘(12 F.2d 122 (5th Cir. 1983), the arbitrator’s

award that the court set aside had ordered in 1977 rein-

statement without back pay of a truck driver who had

been discharged in 1975, thus imposing a two year sus-

pension without pay. In United States Postal Service v.

American Postal Workers Union, 736 F.2d 822 (1st Cir.

1984), the arbitrator ordered reinstatement of a window

clerk who had confessed to embezzlement and had been

given probation by the court and ordered to make restitu-

tion. The reinstatement directed, however, was without

16 Agreement between United States Steei Corp. and Steelworkers,

Section 8-D (exp. 8/86) reprinted in CBNC 27:16.

15

back pay and not to the grievant’s former position but,

rather, to one where “similar action” to that which had

occurred “could not take place,” with the additional con-

dition that deductions be made from his pay to accomplish

the restitution.

III. In Determining Whether Standards of Industrial Jus-

tice Have Been Met, Arbitrators Are Authorized to

and Do Decide Questions of Public Pelicy and, in Par-

ticular, Public Policies Relating to Safety

Unless constrained by other provisions of the collective

agreement an arbitrator who is directed by the parties

to consider whether the discipline imposed by the em-

ployer is “just,” or “proper” or “sufficient” necessarily

must take into account any public policy relating to the

justice of the discipline. As another past president of the

Academy, Professor Edgar A. Jones, Jr. put it in an

address to the Academy, considerations of justice create

a “necessity for an arbitrator to assess ‘the common stock

of legal ideas’ about what is tolerable in our society.”

This is particularly true of the public policy issue pre-

sented in this case: safety.

A review of all published arbitrators’ decisions con-

ducted by Professor Alfred Blumrosen more than 25

years ago under the title “Public Policy Considerations in

Labor Arbitration Cases’ ’** demonstrated what clearly

remains true today: arbitrators consider it their duty to

take account of public policy considerations in determin-

ing “just cause.” He found that arbitrators “handle pub-

lie policy considerations with understanding and intelli-

gence.” ’® And a sampling of recent decisions dealing

17 Jones, The Role of Arbitration in State and National Labor

Policy, in Arbitration and the Public Interest, Proceedings of the

24th Annual Meeting, National Academy of Arbitrators 42, 53

(1971). :

18 Blumrosen, Public Policy Considerations in Labor Arbitration

Cases, 14 Rutgers L.Rev. 217 (1960).

19 Jd. at 263.

16

with safety considerations where drug or alcohol abuse is

alleged underlines his conclusion.

For example, in Asarco, Inc., 76 LA 162 (H.H. Grooms,

1981), the arbitrator sustained the discharge of an. em-

ployee because he entered the mine under the influence

of alcohol, saying: ,

“This arbitrator has no little appreciation of the

risks attendant to underground mining, having de-

cided over a hundred arbitrations arising out of that

field. He has been to the face of a coal mine, 3,000

feet below the surface. He has observed miners carry-

ing out their customary tasks. While he has not been

down in a zine sulfide mine, he.cannot conceive of it

being as safe as a package terminal, a warehouse, or

an assemblyline. .. . It is a place where safety must

continually be foremost in each employee’s mind. It

is a place where even a brief omission of basic mine

safety can lead to serious injury or death not only of

the employee involved but very likely others in the

area.” 76 LA at 165.

In Cities Service Co., 77 LA 1180 (C.C. Brisco, 1982),

another case of a discharge for reporting to work under

the influence of alcohol, the arbitrator sustained the dis-

charge, saying:

“... The Company’s or€ processing facility with

its open tanks, moving machinery and metal grating

walkways and stairs is full of hazards, especially for

a person who is not fully in command of all of her

faculties. There are ample reasons for enforcing a

stringent rule against reporting for work under the

influence of intoxicating liquor.” 77 LA at 1184.

This is particularly true where the employment of the

discharged employee required him to operate vehicles or

otherwise create a hazard for the public. Thus in In-

dianapolis Power and Light Co., 87 LA 826 (M.M. Volz,

1986), the arbitrator in sustaining the discharge of an

employee for the use of drugs off the job, said:

17

“In passing on the severity of the discharge penalty

imposed, we observe that the Company is a public

utility, the actions of which are under careful scru-

tiny by the public and by the regulatory agencies.

The obligations to conduct safe operations and to

have safety-minded employees are contractually im-

posed and cannot be compromised. Here the griev-

ant did work with and in the vicinity of other em-

ployees; he operated Company vehicles, sometimes on

public roads; he had notice of the Company’s anti-

drug policy and that the possible penalty could be

termination.” 87 LA at 830.

Again, in Consolidation Coal, Co. 87 LA 729 (R.Hon,

1986), the arbitrator sustained the discharge of an em-

ployee found to be working under the influence of drugs,

saying:

“possession and/or use of illegal drugs is generally

regarded as an offense which constitutes such an

‘industrial felony.’ This is particularly true in the

mining industry, where the operation of heavy ma-

chinery compounds the inherent hazards of the job.

Working under such conditions requires full physical

and mental capacity at all times to a higher degree

than jobs with lesser safety considerations. . . . To

condone grievant’s actions in any way could lead

other employees to believe that they can violate such

a fundamental conduct rule, endanger the safety of

other employees, and still retain their jobs. A coal

mine, with its inherent dangers and hazards, is not

a place where such conduct can be countenanced.” 87

LA at 737.

Arbitral consideration of public policy in determining

whether “just cause” for discharge exists is not confined

to conduct on the plant premises. Although arbitrators

will generally not sustain discipline based on conduct un-

connected with a grievant’s work, they do sustain dis-

charges where off-duty conduct prevents the employer

from fulfilling its public responsibilities. Thus, convic-

tion of an employee of drug dealing totally unconnected

18

with the work place has been found to constitute “just

cause” for discharge because of its effect on the employer’s

credibility in its effort to combat drug use in the work-

place in the interests of safety.*? Even in the absence of

a criminal conviction a discharge has been sustained as

just on the basis that a publicized arrest for possession of

cocaine off the employer’s premises would adversely affect

the employee’s ability to perform a public function.”

To be sure, arbitrators do not sustain discharges as

~ “just” in every case in which the use of drugs or alcohol

in violation of a management rule is found, even where

there are serious safety considerations. Safety is not the

only public policy consideration which an arbitrator may

take into account in determining whether the standard of

“just cause” has been met. Society has an interest in

rehabilitation, an interest in preserving the opportunity

of employees who have erred to continue as useful mem-

bers of the working force, an interest in not relegating

to the scrap heap those who have served long and well.

These interests are particularly strong in a society where

drug and alcohol dependence problems have become wide-

spread. In recognition of this interest as well as of their

own, many employers have established what have come

to be called generically Employee Assistance Programs to

deal with drug and alcohol abuse.** Indeed, the largest

employer in the country, the government of the United

States, has recently mandated the adoption of such pro-

grams. See Executive Order 12564, 51 F.Reg. 32839

(September 15, 1986), requiring each executive agency to

establish a program emphasizing, among other things,

“counseling, referral to rehabilitation, and coordination

with available community resources.”

20 Lanter Co., 87 LA 1300 (J.R. Thornell, 1987).

21 Wayne State University, 87 LA 953 (M. Lipson, 1986).

22 The various approaches to drug and alcohol abuse problems are

discussed in T.S. Denenberg and R.V. Denenberg, Alcohol and

Drugs: Issues in the Work Place (1983).

19

Where such programs exist and the discharged em-

ployee has not been afforded an opportunity to participate,

arbitrators may set aside discharges and direct the em-

ployer to make the services of the program available to

the employee.”* Even where there are no such programs,

many arbitrators will, depending on the employee’s record

and his willingness to undertake rehabilitation, direct re-

instatement following completion of a rehabilitation pro-

gram on condition that the employee subject himself to

appropriate testing to show that he is free of the offending

substance.** In other situations, where there is no indica-

tion that the discharged employee will repeat the offense

and his prior record is clean, arbitrators may order im-

mediate reinstatement but on a probationary basis subject

to automatic discharge for a second offense.** What arbi-

trators do in these situations is analogous to the function

courts perform in determining whether a convicted of-

fender shall be sent to prison or be put on probation

subject to conditions designed to minimize potential

dangers to the public.

To sum up, in discharge cases subject to a “just cause”

provision the arbitrator’s function is to determine whether,

given all of the facts and circumstances which he finds

in the case before him, there was just cause for the em-

ployer to impose the discipline involved and, if he finds

that there was not, to order an appropriate remedy. In

cases based on the use of drugs or alcohol consideration

of both questions may involve consideration of whether

there is a rehabilitation program, whether the employee

has agreed to enter it or has been denied use of it,

23 See Armstrong Rubber Co., 77 LA 775 (A.M. Koven, 1981) ;

Springfield Mass Transit District, 80 LA 193 (V. Gunther, 1983) ;

Washington Metropolitan Area Transit Authority, 82 LA 150 (H.N.

Bernhardt, 1983).

24 Atchison, Topeka & Santa Fe Ry. Co., 87 LA 972 (J.R. Johnson,

1986) ; Morgan Adhesives, 87 LA 1039 (R.I. Abrams, 1986).

*5 Signal Delivery Service, Inc., 86 LA 75 (E.M. Weis, 1985).

20

whether, on the evidence, there is any indication that the

employee will repeat the offense and, finally, the hazard

to the discharged employee, other employees, the employer

or the public created by the employee’s conduct. All of

these factors arbitrators can and do take into considera-

tion, in varying degrees, depending upon the particular

circumstances. The parties have assigned that function to

the arbitrator and have agreed that, as the chosen proctor

of the bargain, his decision shall be final.

IV. A Court Should Not Set Aside an Arbitrator’s Decision

as to the Justice of Discipline on Public Policy Grounds

Unless the Remedy Prescribed by the Arbitrator Would

Require a Violation of Law

It is with this understanding of the arbitrator’s func-

tion in disciplinary cases subject to a “just cause” stand-

ard that we now address the question of whether, and

under what standards, a court should set aside awards

in such cases in suits subject to Section 301.

We begin by restating the obvious. As former Dean

St. Antoine has put it, “The arbitrator is the parties’

officially designated ‘reader’ of the contract.” ** “The ar-

bitrator’s award should be treated as though it were a

written stipulation by the parties setting forth their own

definitive construction of the labor contract.” ** Thus,

when an arbitrator decides that an employee’s discharge

for violating a rule was not for “just cause” and orders

reinstatement, with or without back pay and with or

without conditions, it is just as if the parties had agreed

in so many words that on the particular facts this was

the prescribed remedy. It follows that a court asked to

set aside the award should do so only if it finds that an

_ St, Antoine, Judicial Review of Labor Arbitration Awards: A

Second Look at Enterprise Wheel and its Progency, in Arbitra-

tion—1977, Proceedings of the Thirtieth Annual Meeting, Na-

tional Academy of Arbitrators 29, 30 (1978).

27 Ibid.

21

agreement prescribing that remedy is an unenforceable

one.

If the parties’ agreement, as so read, requires action

that would violate a federal or state statute or regulation

it is obviously uneforceable. In some cases a dispute as

to whether the relief requested would violate the law is

presented to the arbitrator. Some arbitrators will resolve

the dispute on the theory that the agreement should be

deemed to include all applicable law. Others will refuse

to do so.*8

No matter which way the arbitrator resolves this ques-

tion, however, it remains clear that in an action to en-

force or set aside his award, a court should set it aside if

it concludes that the remedy the arbitrator has ordered

for the agreement violation would contravene a valid law

or regulation. See Evans Products Co. v. Millmen’s Union

No. 550, 159 Cal.App.3d 815, 205 Cal.Rptr. 731 (1984)

refusing enforcement of Evans Products, Co., 70 LA 526

(D. Feller, 1978). Sometimes courts have referred to the

role of the courts in such cases in terms of “public policy.”

Most of the decisions refusing to enforce, or vacating,

arbitrators’ awards, however, were not discharge cases

but involved awards which required affirmative action in

violation of statutory limitations.2® But even an award

28 The proper course of action for an arbitrator in such a situa-

tion has been the subject of much controversy at the meetings

of the National Academy and has been termed the Meltzer-Howlett

controversy. The controversy and the arbitration decisions in which

there was a conflict between external law and the agreement are

reviewed in Feller, The Impact of External Law, in The Future

of Labor Arbitration in America 83, 90 ff. (1976).

29 See, e.g., General Warehousemen v. Standard Brands, 579 F.2d

1282 (5th Cir., 1978), cert. den., 441 U.S. 957 (1979) (award re-

quired employer to give to employees displaced from one plant

22

of reinstatement under a “just cause” provision cannot

stand if there is a statutory bar to employment, as in

American Postal Workers v. United States Postal Service,

682 F.2d 1280 (9th Cir. 1982) (re-employment of one

who strikes against the government prohibited by 5

U.S.C. § 7311). Except in such cases an award finding a

lack of just cause for discharge should not be set aside on

public policy grounds.

This is particularly clear where the public policy in-

voked is safety. This issue has already been decided by

this Court although in the converse situation: where it is

the union that relies on .ne safety issue to avoid com-

pliance with an arbitral determination.

In Gateway Coal Co. v. United Mineworkers, 414 U.S.

368 (1974), the issue was whether a strike by miners

during the term of an agreement to protest alleged un-

safe conditions could be enjoined. The district court had

enjoined the strike and ordered immediate arbitration of

the miners’ safety complaint. The arbitrator decided that

their claim of hazard was without merit. As the case

came to the Court of Appeals for the Third Circuit the

issue was whether the injunction should be continued

superseniority at another plant where a different union was the

certified bargaining agent, in violation of the National Labor Re-

lations Act); Botany Industries v. N.Y. Joint Board, 375 F.Supp.

485 (S.D.N.Y. 1974) (award required employer to violate Section

8(e) of the National Labor Relations Act).

A court may preperly set aside an award in the converse case—

where the contract, as the arbitrator reads it, requires employees

to violate the law. Thus, in Teamsters Local 249 v. Consolidated

Freightways, 464 F.Supp. 2699 (W.D.Pa. 1979), the collective agree-

ment as read by a joint management-union committee required truck

drivers to obey orders to drive trucks in violation of the Penn-

sylvania Motor Vehicle Code. The District Court quite properly

set aside the committee decision, which it termed an “arbitration”

award.

Oe ae ee ee ne

23

after the arbitator had so ruled. That court ordered

vacation of the injunction against the strike, saying:

“Considerations of economic peace that favor arbi-

tration of ordinary disputes have little weight here.

Men are not wont to submit matters of life or death

to arbitration and no enlightened society encourages,

much less requires, them to do so. If employees be-

lieve that correctible circumstances are unnecessarily

adding to the normal dangers of their hazardous em-

ployment, there is no sound reason for requiring them

to subordinate their judgment to that of an arbitrator,

however impartial he may be. The arbitrator is not

staking his life on his impartial decision. It should

not be the policy of the law to force the employees

to stake theirs on his judgment.” Gateway Coc! Co.

v. United Mine Workers, 466 F.2d 1157, 1160 (3d

Cir. 1972).

This Court reversed, quoting extensively from Warrior

& Gulf to the effect that the labor arbitrator is usually

chosen because of the parties’ confidence in his knowledge

of the common law of the shop and their trust in his

personal judgment. The Court concluded:

“We think these remarks are as * ‘plicable to labor

disputes touching the safety of th. employees as to

other varieties of disagreement. . . . The Court of

Appeals majority feared that an arbitrator might be

too grudging in his appreciation of the workers’ in-

terest in their own safety. We see little justification

for the Court’s assumption, especially since the

parties are always free to choose an arbitrator whose

knowledge and judgment they trust.” 368 U.S. at

379.

These considerations are equally applicable where it is

the employer rather than the union that resists the

arbitrator’s conclusion on the basis of the public’s interest

in safety.

24

In every case involving an arbitration award ordering

reinstatement, as in this case, or enjoining a strike over

safety issues, as in Gateway Coal, the party seeking to

avoid the arbitrator’s decision is not acting as a dis-

interested representative of the public. Public policy is

being invcked in the private interest of the party in an

effort to avoid the bindirg effect of a decision adverse

to it on the safety issue. Whether the private party be

the union or the employer, it should be bound by the ar-

bitrator’s decision if it has been-stipulated that his

decision shall be final and binding, as it has been in this

case and in Gateway Coal.

That principle should apply not only where the public

policy urged as the ground for vacating an arbitrator’s

decision is safety but in any case in which the arbitrator

is given the authority to determine whether there is “just

cause” for discharge. By vesting in the arbitrator the

power to determine the justice of the discipline, and the

appropriate remedy where justice requires it, the parties

have delegated to the arbitrator the authority to deter-

mine the weight to be given to public policy, and the

principles of Enterprise Wheel & Car require that the

courts respect his determination.

In so urging we do not necessarily agree in full with

the broad principle set forth in Judge Easterbrook’s con-

curring opinion in E.J. DuPont Co. v. Grasselli Employ-

ees Association, 790 F.2d 611 (7th Cir. 1986), cert.

denied, 55 U.S.L.W. 3235 Oct., 1986). Judge Easter-

brook there argued that only where a collective agree-

ment, as read by the arbitrator, “violates a rule of law”

may a court set it aside on public grounds. We need

not go that far. That rule is appropriate where the

arbitrator has been given authority to determine whether

the punishment imposed by the employer for violating a

rule is just. It may be but is not necessarily appropriate

where the issue is whether the rule itself is contrary to

public policy.

25

As we have earlier stated, au arbitrator has no author-

ity to set aside the agreement under which he serves as

contrary to public policy. His river of authority can rise

no higher than its source, the collective bargaining agree-

ment. A court may perhaps, in carefully limited cases,

determine that the rule of employee conduct prescribed

by the agreement is unenforceable as against public policy

even though not contrary to law.*® We offer no principle

to govern such cases other than the one already enun-

ciated by this Court in W.R. Grace & Co. v. Rubber

Workers Local 759, 461 U.S. 757, 766 (1983): the public

policy “must be well defined and dominant, and is to be

ascertained by ‘reference to the Jaws and legal precedents

and not from general considerations of supposed public

interests. Muschany v. United States, 324 U.S. 49, 66

(1945).’” But where, as here, the question is whether an

order of reinstatement based on a finding that there was

not just cause for discharge should be enforced, the

stricter rule urged by Judge Easterbrook is the only

tolerable one. |

Any other rule would lead to the possibility of results

such as that reached by the Supreme Court of California

in Black v. Cutter Laboratories, 43 Cal.2d 788 (1955),

cert. dismissed, 352 U.S. 859 (1956). That court refused

enforcement of a “just cause” order of reinstatement on

what it regarded as strong public policy grounds: Com-

30 A case in point is Meat Cutters Local No. P-1236 v. Jones

Dairy Farm, 680 F.2d 1142 (7th Cir. 1982). The agreement there

authorized the employer to promulgate a rule prohibiting employees

in a meat packing plant from reporting directly to the United

States Department of Agriculture inspectors. The union’s chal-

lenge of the rule was rejected in arbitration. The Court of Appeals

set the award aside on the ground that it violated the public

policy expressed in the Meat Inspection Act, 21 U.S.C. §§ 602ff.

The question in the case was not whether discipline imposed for

violation of the rule was just. (In fact the only discipline was a

reprimand which was later revoked by agreement.) The issue was

the validity of the rule itself.

26

munist party membership. This Court refused to re-

view that decision but that was before it had developed

the present overriding federal policy requiring the op-

posite result, a subject to which we now turn.

V. Federal Labor Policy Requires a Strong Re-Affirmation

of the Rule of Enterprise Wheel & Car and the Re-

jection of an Expansive Public Policy Exception.

Any rule other than the one we urge with respect to

the enforcement of awards would itself be contrary to

the dominant federal policy supporting labor arbitration.

That policy is based upon reliance on arbitration to

foster industrial peace. This Court’s decisions, not only

in the Steelworkers Trilogy, but also in Teamsters Local

174 v. Lucas Flour Co., 369 U.S. 95 (1962), and Boys

Markets v. Reiail Clerks, 398 U.S. 235 (1970), rest on

a sound understanding of the collective bargaining process

and ea clear vision of the role of arbitration in making

that process effective.

As the Court observed in Warrior & Gulf, grievance

arbitration is not a substitute for litigation but a sub-

stitute for the strike as a method of resolving disputes

arising during the term of a collective bargaining agree-

ment: “Complete effectuation of the federal policy is

achieved when the agreement contains both an arbitra-

tion provision for all unresolved grievances and an abso-

lute prohibition of strikes, the arbitration agreement be-

81Tt is somewhat curious that a potential public policy defense

existed in the only other case in this Court in which enforcement

of an order of reinstatement under a “just cause” provision was

contested, Enterprise Wheel & Car. In that case reinstatement had

been ordered, with some loss of pay, for employees who had engaged

in a strike over an arbitrable grievance in violation of contract.

The public policy against such activity is certainly a strong and

weli defined one based on statute, but no suggestion was made that

the award was therefore unenforceable.

ee ee OT a A

27

ing the ‘quid pro quo’ for the agreement not to strike.” *

That policy has been implemented not only by ordering

arbitration when the parties have agreed to it and by

enforcing arbitration awards. The Court has also acted

to protect the employer’s interest in peaceful resolution of

disputes over interpretation and application of the

agreement.

Thus in Teamsters Local 174 v. Lucas Flower Co.,

it was held that a no-strike clause must be implied

from a union’s promise to arbitrate. When the Court

became persuaded that the employer was inadequately

protected by a damage action for union breach of a no-

strike clause or by the self-help remedy of discharge of

striking employees, it overrode the Norris-LaGuardia Act

prohibition of federal court injunctions against strikers,

authorizing federal district courts to enjoin breach of

contract strikes over arbitrable grievances (Boys Mar-

kets v. Retail Clerks; see also Buffalo Forge Co. v.

United Steelworkers, 428 U.S. 397 (1976), and Gate-

way Coal Co. v. UMW, 414 U.S. 368 (1974), in which

a promise not to strike was implied from a commitment

to arbitrate, following Lucas Flour, and the implied

promise was held to justify an anti-strike injunction,

following Boys Markets). Given an agreement to arbi-

trate, those decisions compel the union to arbitrate and

preclude strike. The union that has gained the employer’s

commitment to arbitration in exchange for a no-strike

pledge is not to be permitted the de facto power to rewrite

the bargain unilaterally and strike or arbitrate at its

option.

Nor is the individual employee or the union permitted

to bypass the grievance and arbitration procedure in

order to gain the ear of a more sympathetic judge or

jury, or more expansive relief than is usually available

in arbitration. Except where the union breaches its duty

32 363 U.S. at 578, n.4.

28

of fair representation, Vaca v. Sipes, 386 U.S. 171

(1967), the employee is confined to the forum and to

the remedies provided by the collective bargaining agree-

ment. Republic Steel Co. v. Maddox, 379 U.S. 650 (1965).

The rule announced in Enterprise Wheel and Car is an

essential part of this carefully built structure. The rule

of that case, that whatever its own view of the merits,

a court must enforce an arbitrator’s resolution of a dis-

pute as to the proper application of a contract, is not

one that is naturally congenial to judges accustomed to -

exercising the ultimate power to decide what agreements

mean and what consequences should follow from their

breach. The temptation to correct what a court believes

to be a clearly erroneous result is a strgpg one, particu-

larly where, as here, the decision is made by one not

skilled in the law. And so some courts, although paying

lip service to the principles of Enterprise Wheel and Car,

as the court below did, resort to other doctrines in order

to make what they believe to be the required correction.

Sometimes the doctrine invoked is that the arbitrator ex-

ceeded his jurisdiction because plainly wrong.* In other

cases, as in this case, the theory is that the arbitrator’s

decision is contrary to public policy. In either case the

result is to substantially undercut the federal poliey de-

signed to encourage the use of arbitration rather than

the strike as a method of resolving disputes during the

term of an agreement.

It is significant that in almost every case in which

arbitration is provided as a substitute for the strike the

parties stipulate that the arbitrator’s award shall be final

and binding. Advisory arbitration is virtually unknown

in private industrial relations. What the parties seek in

83 The principal cases are reviewed in Morris, Twenty Years of

Trilogy: A Celebration, in Decisional Thinking of Arbitrators

and Judges, Proceedings of Thirty-Third Annual Meeting, National

Academy of Arbitrators 331, 351ff (1981).

29

arbitration is speed, flexibility and finality. The advan-

tages of arbitration over the more traditional method of

settling disputes by a work stoppage is substantially

lessened if, at the end of the arbitration process, litiga-

tion must be undertaken in order to achieve the result

mandated by the arbitrator. The danger is not only that,

as in this case, one party or another may succeed in up-

setting the arbitrator’s decision. The danger is that such

cases will serve as beacons inviting the parties in other

cases to resist compliance with arbitrators’ decisions in

the hope that they too can succeed in like manner, or at

least achieve substantial delay.

The number of cases in which arbitrators’ awards have

been set aside on public policy or other grounds is not

large. But the number of cases in which it has been

necessary to institute litigation to enforce arbitrators’

awards or in which suit has been brought to set them

aside is quite large and growing.** It is therefore crit-

ically important for the maintenance of the structure of

law which this Court has created that the limitations on

the power of a court to set aside or refuse to enforce an

arbitrator’s award be again set out in strong terms so

that the temptation to go to court after the arbitration

process has been concluded will be substantially reduced.

34In the five year neriod 1981-1985, there were more than 50

reported federal circuit court of appeals decisions in which the

validity of an arbitrator’s award was contested. In only a very few

was the contest successful. See 2 Bureau of National Affairs,

Labor Relations Cumulative Digest and Index 1981-1985 (1986)

2549-2571. The number of district court cases, most of which are

unreported, is obviously several times greater. A similar digest

of appellate decisions covering a ten-year earlier period reports less

than a third of the number reported for 1981-1985. 2 Bureau of

National Affairs, Labor Relations Cumulative Digest and Index

1971-1975 (1976) 1659-1667.

30

CONCLUSION

For the reasons stated the judgment f the Court of

Appeals should be reversed and the cause remanded with

directions to enforce the arbitrator’s award.

Respectfully submitted,

DAVID E. FELLER *

Special Counsel

Boalt Hall

Bancroft at Piedmont

Berkeley, CA 94720

(415) 642-0629

Of Counsel: WILLIAM P. MURPHY

JAN VETTER President, National Academy

Boalt Hall of Arbitrators

Berkeley, CA 94720 School of Law |

(415) 642-0821 University of North Carolina

Chapel Hill, North Carolina 27514

(919) 962-4124

Attorneys for the

National Academy of Arbitrators

* Counsel of Record