# Amicus Curiae Brief — Paperworkers v. Misco, Inc.

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Amicus Curiae Brief
- **Published:** January 1, 1987
- **Citation:** 484 U.S. 29

## Text

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

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385012_1105%3A11. Public record. Not legal advice.