Opposition Brief — Jersey Coast Egg Producers, Inc. v. Local 863, International Brotherhood of Teamsters

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| _ 85- 7 Supreme Court, U.S.

No. 85-1313 agegget

MAR 10 1986

IN THE JOSEPH F. SPANIOL, JR.

Suprene Court of the United erates

Octroser Term, 1985

e)

JERSEY COAST EGG PRODUCERS, INC., a corpora-

tion of the State of Delaware,

Petitioner,

VS.

LOCAL UNION NO. 863, INTERNATIONAL BROTHER-

HOOD OF TEAMSTERS, CHAUFFERS, WAR#H-

HOUSEMEN AND HELPERS OF AMERICA and

DOUGLAS SAMUELS,

Respondents.

On Petition for Writ of Certiorari to the United States

Court of Appeals for the Third Circuit

BRIEF FOR RESPONDENTS IN OPPOSITION

ie SO EE AT IE I OI ASST + stn

KennetH I. Nowak

Zazzaul, ZAZZALI & KRoiu

Attorneys for Respondents

Gateway One

Newark, New Jersey 07102

(201) 623-1822

James R. Zazzat,

Of Counsel

—— =

cinienttaiesiiietiicasamiinaiaimate a

Adams Press Corp., 1188 Raymond Boulevard, Newark, New Jersey 07102—-(201) 623-8611

TABLE OF CONTENTS

PAGE

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RES Seige tl Leven nea iee ONE A eae Re PRPS tr 2

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ArGUMENT—The Court should deny the Com-

pany’s petition for a writ of certiorari because

the Court of Appeals below correctly ruled

that in labor arbitrations the parties bargained

for a decision by the arbitrator under the col-

lective bargaining agreement, and the decision

as to what weight, if any, should be given to a

municipal court Judgment was for the arbitra-

tor to decide, not a court; in this case the arbi-

trator’s decision drew its essence from. the

contract based upon the evidence he heard, and

his refusal to accord dispositive effect to the

municipal court judgment was not manifest

disregard of the law nor contrary to public

RNIN Snakes at pineksieiencucccaiteamcactnnabtibenahinienenlabeteduniiniwn 13

I cat eaaten NIRS Pe AN AONE Oe a ee 3

il TABLE OF AUTHORITIES

PAGE

Table of Authorities

Cases Cited

Aldens Inc., 61 LA (BNA) 663 (1973) cccccccccccccccccee-- 25

Alexander vy. Gardner-Denver Co., 415 U.S. 36, 94

S. Ct. 1011, 39 L. Ed. 2d 147 (1974) .....:.0.........:.. 15-18

Application of Citizens of Day Care Center, Ine. v.

Community Social Agency Employees Union, 59

A.D. 845, 399 N.Y.S. 2d 10 (App. Div. 1977) ............ 24

Auxilliary Power Corp. v. Eckhardt & Co., 266 F.

Sapp. 1000 (6.0. N.Y. 1006) 2 W.6 24, 25

Barrentine v. Arkansas-Best Freight System, 450 U.S.

728, 101 S. Ct. 1487, 67 L. Ed. 2d (1981) ........ 14, 15,17

Bell Aerospace Co. v. Local 516, United Automobile

Workers, 356 F. Supp. 354 (W.D. N.Y. 1973) 200... 20

Buffalo Forge Co. v. United Steelworkers, 428 U.S.

897, 96S. Ct. 3141, 49 L. led. 2d 1022 (1976) oo... 29

Crooker v. United States, 620 F.2d 313 (1st Cir.), cert.

ams., GOD US, ST CUBR) ..ccnckccceee eee 22

—_—_ Witter Reynolds Inc. vy. Byrd, 53> U.S.LAW.

4222 (Sup. Ct. March 4, 1985) oc ccccscccecscseceecens 28

Dickinson v. Ileinhold Securities, Inec., 661 F.2d 641

RE SAR, TBE ) aos icssexensesciocei were 27, 28

Fairchild & Co., Ine. v. Richmond, Fredericksburg &

Potomac R. Co., 516 F. Supp. 1805 (D.D.C. 198i) 19

Fukaya Tragling Co. v. astern Marine Corp., 322 F.

Supp. 278 (D. La. 1971)

a a eer

lagi

TABLE OF AUTHORITIES lil

PAGE

Garner v. Grarusso, 571 F.2d 1530 (Sth Cir. 1975) 2... 22

Gilberg v. Barbieri, 55 N.Y. 2d 285, 441 N.Y.S. 2d 49,

aa0 Bb. 2a O07 (Ct. of App. 198]1) ............................22, 23

ITT Continental Baking Co., 72-2 ARB (CCH) 98490

Se eta, eae 26

John Wiley & Sons vy. Livingston, 376 U.S. 543 (1964) 15

Ludwig Honold, Mfg. Co. v. Fletcher, 405 F.2d 1125

ec ha ca taansaesiswensnvnsnastansssavees 20

McDonald v. City of West Branch, —— U.S. ——,

104 S. Ct. ——, 80 L, Ed. 2d 302 (1984) 0.0... 15, 17

Mobil Oil Corp. v. Independent Oil Workers Union,

SE AS by) 11

Newark Stereotypers’ Union No. 18 v. Newark Morn-

ing Ledger Co., 897 F.2d 594 (3d Cir. 1968) ..000-.. 1S

New Jersey-Philadelphia Presbytery of the Bible

Presbyterian Church v. New Jersey State Board

of Higher Edueation, 654 F.2d S68 (3d Cir. 1981) IS

New York Ass’n For Retarded Children v. Carey,

NS TE GD Yb) 28

tion Co., Inc., 469 F.2d 377 (2d Cir, 1972) ................ 20

San Martine Companania De Nav. vy. Saguenay Term.

Ltd., 293 F.2d 796 (9th Cir. 1961) ............. Ree Ane 19

Saxis Steamship Co. v. Multifaes Internat’l Traders,

eee ms ee tac) Ger, 1967) ..........-................. 20

Sidarma Societa Italiana Di Armamento Spa, Venice

v. Holt Marine Industries, Inc., 515 FL Supp. 1302

de scission cata chusvaysuncnacinsesxsecnscensnneses 20

iv TABLE OF AUTHORITIES

PAGE

Shearson Hayden Stone, Inc. v. Liang, 493 F. Supp.

ae | SNR NI Ie, RU A UC 19, 20

Stockwell v. Reynolds, 252 F. Supp. 215 (S.D.N.Y.

RED -scccriadicaracidnmnsteceiininl eibinmnaedeaeataaamaim as 28

Tipler v. Du Pont de Nemours & Co., 443 F.2d 125

SRE SBR eS yrateciccciseneessecianeindcdima cae dinbenbeeneamanie 22

United Steelworkers vy. Enterprise Wheel & Car

Corp., 363 U.S. 593, 80 S. Ct. 1858, 3 L. Ed. 2d

RE COD uiurccciudemncnsiicapciccieaaieinns careaedilaad 14-17

United States v. Agee, 597 F.2d 350 (3d Cir.) (en

bane), cert. den., 442 U.S. 944 (1979) oe. 22

United States v. Kwasniewski, 91 F. Supp. 847 (1.D.

RN nT SM ATS ee ee ee ON 22

Wilko v. Swan, 546 U.S. 427, 748. Ct. 182, 98 L. Ed.

WU TARR oe eee 16, 19, 20

W.R. Grace & Co. v. Local Union No. 759, Internat’!

Union of Rubber Workers, 461 U.S. 757, 103 S. Ct.

SAE as 50 Ras Gy MR EE LEED Sereeicrecicn es 15, 16

Village of Valley Stream v. Loeal 54z, 89 A.D. 2d

1016, 454 NYS. 2d 461 (App. Div. 1982) .00000........28, 24

Statutes Cited

Dean Br NEE daniesnsaichanciiie eetlssaecscannnalneacinibaaantoasth )

Dis. Sk: GAA | rag tartarn pra stpetaiespectginnidlttcs aaeeeaeatincns 3, 0

Penal Law of New York:

6240.25 29

TABLE OF AUTHORITIES

eh ot

a a

I SE orice cn ee

A SRO i

I SI aii acai iscssccscsninicisnlnbbcnesdpscnnncizras

SI nici eosecccrestietecnccsaitlorictidtarmns

29 U.S.C. §173(d) (Labor Management Relations

Act) oNetheninsdswtsetens GreenUneuesect iS ensnemendmmnenaebegacnensnseneeseassnensseshenees

29 U.S.C. $185 (Seetion 301 of the Labor Manage-

OIE: SI a ances

Other Authorities Cited

F. Klkouri & Elkouri, “How Arbitration Works”, (3d

ie. Rien eter aun ont Se REDE aR OPV SEO OR SC ete EN

K. Davis, “Administrative Law Text’, (3d ed. 1972),

PGI suadic acute cae cicada daniatcinalas septate nidcsa asibecainsabe tei

Moore's Federal Practice (2d ed. 1980) §0. 405(1) ....

Restatement of Judgments (1942) $1 22.

©. Fairweather, “Practice and Procedure In Labor

Peer” CIE Ok, TD aansccccccscscncccccnicciniincs

No. 85-1313

IN THE

Supreme Court of the United States

Octroser TERM, 1985

=

>

JERSEY COAST EGG PRODUCERS, INC., a eorpora-

tion of the State of Delaware,

Petitioner,

Vs.

LOCAL UNION NO. 863, INTERNATIONAL BROTHER-

HOOD OF TEAMSTERS, CHAUFFERS, WARE-

HOUSEMEN AND HELPERS OF AMERICA and

DOUGLAS SAMUELS,

Respondents.

On Petition for Writ of Certiorari to the United States

Court of Appeals for the Third Circuit

oa ————

>

BRIEF FOR RESPONDENTS IN OPPOSITION

Jersey Coast Egg Producers, Ine., appellee below, has

petitioned for a writ of certiorari to review the judgment

of the United States Court of Appeals for the Third Cir-

cuit in this case. This brief is submitted on behalf of

respondents Local 868, International Brotherhood of Team-

to

sters, Chauffeurs, Warehousemen and Helpers of America

and Douglas Samuels in opposition to the petition. In

this brief, Jersey Coast Egg Producers, Ine. shall be re-

ferred to as “the Company” and Local 8635, 1.B.T., shall be

referred to as “the Union.”

Opinions Below

The opinion of the court of appeals is reported at 773

F.2d 5380 (8d Cir. 1985) and is set forth in the Company's

appendix at Pal to Pal9.* The court of appeals denied

the Company's petition for a rehearing in bane, and this

denial is set forth at Pa4l. The opinion of the district

court is unreported and is set forth at Pa3s0 to Pads.

Jurisdiction

The district court possessed original jurisdiction pur-

svant to 29 U.S.C. S185 (Section 301 of the Labor Manage-

ment Relations Act) and pursuant to 9 U.S.C. $$ 9 and

10. The court of appeals possessed jurisdiction pursuant

to 2S USC. $1291. This Court has jurisdiction pursuant

to 28 U.S.C, §1254(1)

Statutory Provisiows

The statutory provisions involved in this matter are

YO ULS.C. S185 and 9 U.S.C. 989 and 10.

**Pa” refers to the petititioner Company's appendix.

Procedural History

This is an appeal from a decision of the United States

Court of Appeals for the Third Cireuit reversing the

decision of the Distriet Court for the District of New

Jersey, which had vacated a labor arbitration award. The

Cireuit Court reinstated the arbitration award.

This case orginiated on March 6, 1984, when the Com-

pany discharged Douglas Samuels for allegedly selling one

carton of eggs. The Union grieved the discharge. On

March 14, 1984 the Company filed a complaint in the

Municipal Court of Voorhees Township charging Samuels

with theft of eggs, valued at $35.00, in violation of NwJ.S.A.,

2C 320-3. A non-jury trial on the charge was held on April

9, 1984 in the Voorhees Municipal Court. As a result of

tne trial, Samuels was found guilty and fined $50.00. No

appeal was taken.

In the meantime, the Union's grievance was being pro-

eessed and arbitration was scheduled for July 26, 1984.

On July 12, 1984 the Company moved before the Superior

Court of New Jersey, Chancery Division, to restrain the

arbitration. On July 24, 1984 the Chanecry Division, per

Judge Henry R. Wiley, denied the motion. On July 26,

1984 the arbitration was held before Arbitrator J.J. Pier-

son. On September 11, 1984 the arbitrator issued his

Opinion and Award setting aside the discharge (Pads

to 50). On September 12, 1984 Judge Wiley dismissed the

complaint which had been filed by the Company on July 12,

1984.

On September 17, 1984 the Union filed a petition to

confirm the award in the United States District Court.

On September 18, 1984 the Company filed a motion to

vacate the award in the Superior Court of New Jersey,

Chancery Division. On October 4, 1984 the Union removed

the Company’s motion to the United States District Court

under 28 U.S.C. §1441, alleging as the federal statutes

involved §301 of the Labor Management Relations Act,

29 U.S.C. §185, and 9 U.S.C. $10. On October 19, 1984

the Union’s petition to confirm and the Company’s (re-

moved) motion to vacate were consolidated before Judge

Thompson, U.S.D.J. On October 22, 1984 the Company

moved to remand its motion to state court. The Union

moved for summary judgment to confirm and the Com-

pany moved for summary judgment to vacate the award.

On December 5, 1984 the district court rendered an opin-

ion from the bench (Pa20 to Pa38). That opinion denied

the Company’s motion to remand granted the Company's

motion to vacate, and denied the Union's motion to confirm.

The decision was docketed as an Order on December 5,

1984 (Pa39 to Pa40). The Union appealed.

On September 25, 1985 the court of appeals issued its

decision reversing the district court’s decision (Pal to

Pal9). On November 7, 1985, the court of appeals in bane,

denied the Company’s petition for rehearing (Pa41_ to

Pa42). The Company then petitioned for a writ of cer-

tiorari.

Statement of the Case

Douglas Samuels was employed by the Company as a

truck driver (Pa44). At the time of his discharge, he had

been employed by the Company for 25 years (Pa48). On

February 27, 1984 a customer informed the Company that

he had observed Samuels take a carton of eggs from his

truck and put it in the trunk of a car (Pa45). However,

on that day the Company did not show a shortage of eggs

(Pa47 to Pa48). Nonetheless, on March 6, 1984 the Com-

pany discharged Samuels for theft. The Union grieved.

One week later the Company filed a complaint against

Samuels in the Municipal Court of Voorhees Township,

charging theft of a case of eggs valued at $35.00 in violation

of N.J.S.A. 2C:20-3. Under N.J.S.A. 2C:20-2(b) (3), this

is a disorderly persons offense. A non-jury trial was held

in the Voorhees Municipal Court in the afternoon of April

9, 1984. Samuels retained and was represented at the trial

by an attorney. The Municipal Court found Samuels guilty

of the theft and fined him $50.00. Samuels did not appeal.*

The grievance filed by the Union proceeded through the

various steps and was scheduled for arbitration on July

26, 1984. On July 12, 1984 the Company moved in state

court to restrain the arbitration, but Judge Wiley denied

the motion. The arbitration proceeded on July 26, 1984.

* At oral argument before the district court, counsel for the

Union, responding to an inquiry from the court, explained that

Samuels, who was represented at the municipal court trial by a

criminal attorney, not a labor lawyer, did not appeal because of

the insignificant size of the penalty and the large amount of money

his attorney advised him was entailed in pursuing an appeal, on

top of the amount he already paid for trial (Pa21).

The arbitration was conducted pursuant to the grievance

and arbitration clause contained in the collective bar-

gaining agreement in effect between the Union and the

Company (Pad5l to Pa70). Section 18 of the contract

provides for the grieving of any dispute “concerning the

interpretation or application of” the contract ({Pa64).

If the grievance is not resolved between the parties, the

matter may be submitted to final and binding arbitration

(Pa64). The contract further states that “[t]he Arbitrator

Shall decide cases in issue solely upon the provisions of

this Agreement, and shall have no power to add to, delete

from, modify or alter the provisions of this Agreement.”

(Pa65). The contract also provides that 10 employee shall

be discharged by the Company “except for just and _ suffi-

cient cause” (Pa66) and “[iJf the Union, in any ease,

contends that an employee was discharged without just

and sufficient cause, then and in that event the validity

of said discharge shall be submitted to arbitration in the

manner provided for in Paragraph ‘18.’ (Pa66). Though

the contract does not contain a “Management Rights” pro-

vision, the Company adopted a se* of work rules. Ineluded

among these rules is a seetion ca.ling for termination for,

mter alia, stealing from the Company or its eustomers.

The arbitration of this case was by a full hearing into

all of the facts surrounding the discharge. The Company

‘alled Irwin Moody, its controller and assistant general

inanager, and Steven Hartman, the associate supervisor

of Acme Markets, who had reported the theft to the Com-

pany. The Union called John Braden, business agent of

the Union, and Douglas Samuels, the discharged employee.

During the testimony of the witnesses there was no dis-

cussion of res judicata, collateral estoppel, or any theory

a NI

of preclusive effects of a conviction. However, in its open-

ing statement the Company did state Samuels had been

convicted in municipal court and that the municipal con-

viction should “control.” The Company provided the arbi-

trator with a copy of the transcript of the municipal court

proceeding.

At no point in the arbicration did anyone, Union, Com-

pany or arbitrator, ever mention the words res judicata

or collateral estoppel. There was no discussion or ex-

planation of res judicata or collateral estoppel. The arbi-

trator never discussed those doctrines at all. No post

hearing briefs were submitted.

The arbitrator set aside the discharge. In his award,

issued September 11, 1984, the arbitrator began by noting

that the Company had the burden of persuasion as to just

and sufficient cause for the termination (Pa47). The

arbitrator also observed that his function was to review

the facts before him, weight the evidence, and assess the

credibility of the witnesses (Pa47). Evaluating the record

before him, the arbitrator concluded that the testimony

of the customer who supposedly observed the theft was

not entirely credible (Pa47 to Pa48). For example, even

though the witness claimed the sale of eggs was made

directly in front of him, he did not take down the license

plate of the car into which the case of eggs was putatively

placed and did not check the delivery to see if a case were

missing (Pa47 to Pa48). Also, the arbitrator wondered

why Samuels would sell a case of eggs at the customer’s

location in clear view of the customer (Pa47). Finally, the

arbitrator found it difficult to determine exactly what, if

anything, was stolen in light of the fact that no shortage

was discovered (Pa4s).

The arbitrator emphasized that his role is to judge the

discharge based upon his authority under, and the stan-

dards imposed by, the collective bargaining agreement.

Based upon the facts before him, the arbitrator concluded

that the Company’s March 6 discharge of Samuels was not

for just and sufficient cause. As the arbitrator summarized:

The employer, when contending that an employee

has stolen or committed theft, must support that

allegation of proof of loss. Herein, there was no

proof of loss. Moreover, when considering that Mr.

Samuels had spent over twenty-five years in the

employ of the Company, there should have been

produced more than a vague identification, specifi-

cally a definite description, of what was stolen.

Without such, it is impossible for this Arbitrator

to sustain a discharge on unconvincing identifi-

cations or a misdemeanor conviction.

Based on the evidence presented, this Arbitrator

has not been convinced that the Grievant did com-

mit the act of theft on February 27, 1954. As such,

based on this finding, this Arbitrator must hold that

the Grievant did not violate the Company rule in

paragarph 13 and that there was no just or sufficient

cause for the discharge of the Grievant.

(Pa4S to Pa49). (emphasis in original.)

The Union then moved in federal court to confirm the

award and the Company moved in state court to vacate

it. After the Company’s motion was removed to federal

court, the parties’ motions were consolidated for consider-

ation on cross-motions for summary judgment before

Judge Thompson, U.S.D.J. On December 3, 1984 the

district court read its opinion.

The district court acknowledged that it was the arbi-

trator’s award that was bargained for and that errors in

law or fact by an arbitrator do not justify vacating the

award (Pa34). Rather, noted the district court, there must

be a “perverse misconstruction of the law in order to

vacate an award.” (Pa34). In order to overturn the award,

it must first be concluded that the arbitrator erred as a

matter of law, and second that the error “was in manifest

disregard of the law” (Pa35). The district court then

found that it was an error of law for the arbitrator to

allow the relitigation of the theft. The district court

observed that “the arbitrator was made aware of the con-

viction for theft in Municipal Court” and of the Company’s

rule against theft. In light of this, the district court con-

cluded that the arbitrator’s failure to give “dispositive”

effect to the conviction was a “perverse misconstruction of

the law.” (Pa37).

For these reasons the district court granted the Com-

pany’s motion to vacate the award and denied the Union's

motion to confirm. An Order reflecting this decision was

entered on December 5, 1985 (Pa39). The Union and

Samuels appealed.

The Court of Appeals for the Third Circuit reversed, by

a two to one decision, the decision of the district court.

After fully reciting the relevant facts, including the fact

that the Company discharged Samuels one month before

he was found guilty in municipal court, the circuit court

emphasized that it was the arbitrator’s decision that the

parties bargained for in their labor contract, not the de-

10

cision of some outside source. Thus the cireuit court, citing

Supreme Court decisions, noted that parties to a collec-

tive bargaining agreement choose to have disputes resolved

by an arbitrator, that a court must defer to the arbitrator’s

award and may not substitute its own view, and that a

court may not disturb an'award for error of law (Pa5).

The cireuit court explained that these parties had a

collective bargaining agreement which provided for arbi-

tration of all disputes and which further provided that dis-

charges must be for “just and sufficient” cause. The arbi-

trator, carefully weighing and reviewing the evidence, con-

eluded that the discharge was not for just and sufficient

‘ause pursuant to the contract, but the district court set

aside this award for manifest disregard of the law because

the arbitrator declined to accord dispositive effect to the

municipal court conviction. Without deciding whether

collateral estoppel would apply to an arbitration (though

suggesting in a footnote that it might not), the cireuit court

ruled that it was within the arbitrator’s purview to de-

termine the impact of the judicial finding in the collective

bargaining relationship, and that a court may not super-

impose its own views onto the arbitrator (PaS). Thus

the cirenit court stated that:

it remains the decision of the arbitrator, and the

arbitrator alone, whether the misdemeanor convie-

tion constitutes just cause for the dismissal under

the terms of the collective bargaining agreement.

(Pa9).

Observing that the discharge occurred one month before

the conviction, that the Company (according to the arbi-

trator) failed to prove any loss of product, that Samuels

11

was a 20-year employee, the appellate court remarked that

it was for the arbitrator—not the court—to interprete the

contract’s “just and sufficient cause” requirement. Accord-

ingly, it was a permissible interpretation of the award to

say, under the facts of this case, that the misdemeanor

conviction was not dispositive of just and sufficient cause

for dismissal (Pall). Therefore, the district court’s va-

eatur of the award was in improper imposition of its views

upon the arbitrator. As the circuit court summerized:

The short answer to [the employers] contentions is

that [it] agreed to leave to an arbitrator the resolu-

tion of disputes whether [just] cause existed for

the discharge of any employee represented by [the

union]. The arbitrator has ruled, and [the em-

ployer] is bound by that award.

(Pal2) (quoting from Mobil Oil Corp. v. Independent Oil

Workers Union, 679 F.2d 299, 304 (8d Cir. 1982) (brackets

as in decision).

In a coneurring opinion, Judge Stapleton emphasized

that the arbitrator correctly understood that the parties

bargained for his decision as to whether the employee’s

conduct constituted just and sufficient cause for discharge

under the contract (Pal2 to Pal3). Given that the contract

called for an arbitral, rather than judicial, resolution of

discharge issues, “it cannot be said that this interpretation

of the arbitrator failed to draw ‘its essence from the collec-

tive bargaining agreement.’ (Pal3).

Judge Aldisert dissented. Judge Aldisert opined that a

municipal court conviction weuld be binding upon any

federal or state judge, including a justice of the United

States Supreme Court, and therefore it should also be

binding upon an arbitrator. Judge Aldisert stated that the

conviction did not involve an area or issue requiring speci-

alized knowledge of labor or experience in the law of the

workplace. Accordingly, Judge Aldisert would require the

arbitrator to follow the municipal court finding of guilt.

Since the arbitrator acknowledged that theft constitutes a

basis for discharge, the arbitration award (which rein-

stated the employee) must be vacated.

After the cireuit court issued its decision reversing the

district court and reinstating the award, the Company

moved for rehearing before the full court. The full court

denied this request, and an order on the mandate issued.

The Company then filed a petition for writ of certiorari.

It is the respondent’s position that this case does not

present any novel theory of law requiring this Court’s

review; nor does this decision concern any issue of public

import. This is simply another labor arbitration case in

which the question is whether an arbitrator’s charge is to

construe and apply the collective bargaining agreement. in

effect between the parties or to add to that private con-

tract the external laws of the legislatures and courts. As

this Court has stated before, labor arbitrators are assigned

to interpret the contract pursuant to which they were se-

lected, and they are not chosen to enforce or apply external

laws. For these reasons, it is respectfully submitted that

the petition for a writ of certiorari should be denied.

13

ARGUMENT

The Court should deny the Company’s petition for a

writ of certiorari because the Court of Appeals below

correctly ruled that in labor arbitrations the parties

bargained for a decision by the arbitrator under the

collective bargaining agreement, and the decision as to

what weight, if any, should be given to a municipal

court judgment was for the arbitrator to decide, not

a court; in this case the arbitrator’s decision drew

its essence from the contract based upon the evidence

he heard, and his refusal to accord dispositive effect to

the municipal court judgment was not manifest dis-

regard of the law ner contrary to public policy.

Arbitration is intended to be the ready mechanism where-

by labor disputes are resolved rapidly, informally, and

economically by an arbitrator selected by the parties to

the contract. In this ease the contract provides for arbi-

tration of all disputes, requires just and sufficient cause

for discharge, and directs that the arbitrator decide the

matter based solely upon the contract. Even though the

arbitrator followed this contractual mandate and found

no just and sufficient cause for the discharge of a 25-year

employee, the award has been dragged through the courts.

The result is that a March 1984 discharge, set aside by a

September 1984 arbitration award, remains in the judicial

sphere two years later, at enormous expense to all involved.

Throughout it all, the Company’s constant plea has been

that the award it bargained for in its contract should be

set aside, not because it contravenes the contract but be-

cause it differs from a decision by a municipal! court judge.

The court of appeals rightly eschewed that proposition.

14

As the Third Circuit correctly ruled, the parties agreed

to a decision by an arbitrator who would rule under the

contract, and it was for the arbitrator to assess just and

sufficient cause and to determine what weight, if any, to

accord to the findings of an external entity unrelated to the

contract. This is not a novel proposition. Rather, it is

fully consistent with this Court’s repeated statements that

arbitrations are not judicial proceedings and are not bound

by external laws or judicial orders, that arbitrators have

exclusive authority to determine issues such as burdens

of proof and evidential rulings, and that courts should

decline to review the merits of an award or superimpose

their own views.

Any analysis of arbitration and arbitration awards must

begin with recognition of its legislative authorization as

the mechanism for final resolution of labor disputes. The

Congress has legislated that “[f]inal adjustment by a

method agreed upon by the parties is declared to be the

desirable method of settlement of grievance disputes aris-

ing over the application or interpretation of an existing

collective bargaining agreement.” Labor Management Re-

lations Act, 29 U.S.C. §173(d). Consistent with this legis-

lative mandate, this Court has emphasized that a labor

arbitrator’s award is legitimate only when it draws its

essence from the contract, for she is “confined to interpre-

tation and application of the collective bargaining agree-

ment.” United Steelworkers vy. Enterprise Wheel & Car

Corp., 363 U.S. 5938, 597, 80 S. Ct. 1358, 3 L. Ed. 2d 1424

(1960). If the arbitrator looks beyond the contract to

outside sources, she exceeds the scope of the submission

and her authority, and the award will not be enforced.

Barrentine v. Arkansas-Best Freight System, 450 U.S.

eee

-

15

728, 744, 101 S. Ct. 1437, 67 L. Ed. 2d (1981); Alexander

v. Gardner-Denver Co., 415 U.S. 36, 538, 94 5. Ct. 1011,

39 L. Ed. 2d 147 (1974); Enterprise Wheel &€ Car Corp.,

363 U.S. at 597. As this Court explained:

[A] proper concept of the arbitrator’s function is

basic. He is not a public tribunal imposed upon

the parties by superior authority which the parties

are obligated to accept. He has no general charter

to administer justice for a community which tran-

seends the parties. He is rather part of a system

of self-government created by and confined to the

parties. He serves their pleasure only, to administer

the rule of law established by their collective bar-

gaining agreement.

Gardner-Denver Co., 415 at 52 n.16 (quoting from the

Harvard Law Review). More recently, this Court noted

that arbitration awards are not judicial proceedings sub-

ject to the mandate of 28 U.S.C. $1788. McDonald v. City

of West Branch, U.S. , 1048. Ct. , 80 L. Ed.

2d 302, 307 (1984). In sum, labor arbitration is a congres-

sionally authorized, self-contained, non-judicial system of

resolving disputes in the workplace in an informal and

expeditious manner based upon the parties’ contract and

the law of the shop. Gardner-Denver Co., 415 U.S. at 58;

F. Elkouri & Elkouri, Wow Arbitration Works, (3d ed.

1981) at 2-4. See also John Wiley & Sons vy. Livingston,

376 U.S. 543, 550 (1964). The parties bargained for a

decision by the arbitrator under the collective bargaining

agreement, not for a decision imposed by some outside

source, even if that source is a court. W.R. Grace & Co.

vy. Local Union No. 759, Internat’l Union of Rubber Work-

16

ers, 461 U.S, 757, 103 S. Ct. 2177, 76 L. Ed. 2d 298, 306

(1983).

Not only (and perhaps because of) arbitrations’ non-

judicial origination in the private agreement of the parties,

the courts have refused to impose on arbitrations the rules

and procedures which mark judicial and quasi-judicial fora.

Thus an arbitration award may be made without any ex-

planation of reasons for the award. Enterprise Wheel &

Car Co., 363 U.S. at 598; Wilko v. Swan, 346 U.S. 427,

436, 74S. Ct. 182, 98 L. Ed. 168 (1953). The arbitrator's

concept of statutory requirements such as burden of proof,

material fact, and the like cannot be reviewed. Jd. Judicial

doctrines such as election of remedies do not apply, and

discovery, cross-examination, and testimony under oath

are often unavailable. Gardner-Denver Co., 415 U.S. at

49-51, 57-58.

It is clear that labor arbitrations are wholy outside the

realm of judicial fora. The parties to a labor agreement

have not contracted for the rule of some statute nor for the

decision of a judge. They have bargained for an award

by a mutually agreed upon arbitrator under and in accor-

dance with a private contract, nothing more. Indeed, any-

thing more would be contrary to the parties’ agreement,

except if they expressly provide otherwise in their agree-

ment.*

* There are contracts which contain express provisions allowing

or requiring the incorporation of external sources of law, thereby

rendering those outside sources applicable in an arbitration. See

H.R. Grace, 76 L. Ed. 2d at 306 n.&. However, the contract here

does not contain any such provision. On the contrary, it expressly

limits the arbitrator to the contract (Pa65).

ia

17

In the instant case the parties received exactly what

they bargained for: a determination under the contract

by the arbitrator as to whether just and sufficient cause

for the discharge existed. The arbitrator heard all of the

testimony, reviewed the evidence (including the municpal

court transcript and conviction), and ruled that just and

sufficient cause for discharge did not exist. The award

draws its entire essence from the contract, and for that

reason should not be disturbed by the judiciary. In recog-

nizing and applying this fundamental proposition of law,

the Third Circuit was merely enforcing the standard esta-

blished by this Court. Exterprise Wheel € Car Co., 368

U.S. at 597. The Third Cireuit’s decision does not warrant

review.

The dissent below complained that if a municipal court

conviction could bind a Supreme Court justice, surely it

would bind an arbitrator. Posed in this manner, the dis-

sent’s complaint has visceral impact, but upon more rea-

soned examination it fails. The ultimately dispositive fact

is that an arbitration is not a judicial proceeding. MWe-

Donald, 80 L. Ed. 2d at 307. It is a private dispute-

resolution system wholly separate from any judicial net-

work and not encumbered by the rules and procedures of

judicial or quasi-judicial proceedings. To remark that a

Supreme Court justice might be hound by a lower court

decision while an arbitrator is not does not demean the

justice, for the justice is part of the judicial system while

the arbitrator is not. As this Court has noted again and

again, arbitrators, unlike judges or justices, are commonly

not lawyers, and they hear cases commonly prepared and

presented by non-lawyers. McDonald, SOL. Ed. 2d at 308

n.9; Barrentine, 450 U.S. at 743; Gardner-Denver Co., 419

18

U.S. at 57 n.18 See also Newark Stereotypers’ Union No.

18 v. Newark Morning Ledger Co., 397 F.2d 594, 599 (3d

Cir. 1968).

That arbitrators are frequently not attorneys raises a

practical reason for not requiring the application of col-

lateral estoppel to arbitration. Res judicata and collateral

estoppel are judicially created common law doctrines where-

by the same parties who litigate a claim in one court of

competent jurisdiction may be barred from litigating

that same claim, or an issue contained therein, in a sub-

sequent court. Restatement of Judgments, 41 (1942);

Moore’s Federal Practice, §0. 405(1) (2d ed. 1980). In

order for these preclusive doctrines to apply, there must

be an identity of parties (or their privies), causes of action,

and issues, and they apply only if the claim or issue was

distinetly litigated and directly determined contrary to the

party against whom the preclusion is asserted. New Jersey-

Philadelphia Presbytery of the Bible Presbyterian Church

v. New Jersey State Board of Higher Education, 654 F.2d

868, 876 (3d Cir. 1981). Determination of these prerequi-

sites is often difficult enough for a court; the prospect

of arbitrators having to grapple with these legal intricacies

is frightening, and contrary to the informality and speed

which should be the earmarks of arbitrations. Clearly it is

best that arbitrators be left alone to hear and resolve cases

solely under the contract, without the interdiction of judi-

cial doctrines.

For all of the foregoing legal and practical reasons, the

ruling and reasoning of the Third Circuit was correct:

it is for the arbitrator to determine just and sufficient

cause under the contract, and to assess how much weight,

if any, should be accorded the municipal court conviction.

A in

19

This arbitrator made his determination under the con-

tract, and the parties should be bound by that award

(Pal2).

However, even if this Court concludes that it was an

error of law for the arbitrator to decline to accord dis-

positive effect to the municipal finding, that error does

not warrant reversal of the award, for two reasons. First,

an arbitration award may not be vacated for error of law

but only for manifest disregard of the law, which did not

oecur here. Second, collateral estoppel is not an immutable

doctrine of law uniformily applied in the arbitral setting;

numerous court decisions reveal it to be a judicial creation

subject to discretion, and arbitrators and courts have

declined to apply it in arbitrations. Conversely, there are

no decisions holding that an arbitrator must be bound by

collateral estoppel. Consequently, this arbitrator’s decision

cannot be deemed to be in manifest disregard of the law.

These two propositions will be elaborated upon here.

As the district and circuit courts below noted, an arbi-

tration award may be overturned for manifest disregard

of the law. See Wilko, 346 U.S. at 436-57. Manifest dis-

regard of the law “must be something beyond and different

from a mere error in the law or failure on the part of the

arbitrators to understand and apply the law.” San Martine

Compania De Nav. v. Saguenay Term. Ltd., 293 F.2d

796, 801 (9th Cir. 1961). In order to vacate an award on

the ground of manifest disregard, the complaining party

must establish that the arbitrator understood and correctly

stated the law but proceeded to ignore it. San Martine

Compania, 293 F.2d at 801; Fairchild & Co., Inc. v. Rich-

mond, Fredericksburg & Potomac R. Co., 516 F. Supp.

1305, 1315 (D.D.C. 1981); Shearson Hayden Store, Inc.

20

v. Liang, 493 F. Supp. 104, 108 (W.D. Ill. 1980); Bell

Aerospace Co. v. Local 516, United Automobile Workers,

306 F. Supp. 354, 356 (W.D. N.Y. 1973); Fukaya Trading

Co. v. Eastern Marine Corp., 322 F. Supp. 278 (D. La.

1971). Moreover, this basis for upsetting an award is

“severely limited.” Office of Supply Gov. of Korea v.

New York Navigation Co., [nc., 469 F.2d 377, 380 (2d Cir.

1972); Saxis Steamship Co. v. Multifacs Internat’l Traders,

Inc., 375 F.2d 577, 582 (2d Cir. 1967); Sidarma Societa

Italiana Di Armamento Spa, Venice v. Holt Marine Indus-

tries, Inc., 515 F. Supp. 1302, 13806 (S.D. N.Y. 1981).*

Thus an arbitrator’s award is in manifest disregard of

the law only where the party seeking its vacatur estab-

lishes that the arbitrator understood and correctly stated

the law but proceeded to disregard his own pronouncement.

Yet there is no indication anywhere in the record that any

of the requirements of this extermely narrow exception

were met here. They were not.

At the arbitration there was only passing reference

to, and absolutely no explanation of, the notion that the

municipal court conviction was controlling. Counsel for

the Company asserted that the state judge who refused

to enjoin the arbitration expressed his belief that the arbi-

trator would have to adhere to the municipal conviction,

but counsel for the Union correctly pointed out that that

issue was never before the state judge, was never briefed

*The “manifest disregard” exception to judicial deference to

arbitration suggested in Wilko arose in the context of a commercial

arbitration. However, as Third Circuit has observed, there should

be even greater judicial deference to a labor award. Ludwig Honold

Mfg. Co. v. Fletcher, 405 F.2d 1123, 1128 (3d Cir. 1969).

ee

21

to or decided by him, and that any such statements made

by the judge were his own feelings. In any event, that

judge noted that it would be up to the arbitrator to decide

what weight to give the municipal conviction.* As to the

law surrounding or defining res judicata or collateral

estoppel and/or their application to arbitrations, not one

word was said by either party. A review of the entire

transcript of the arbitration shows that neither the phrase

nor concept, no less the law of, “collateral estoppel” or

“res judicata” was ever mentioned by anyone. There were

no post-hearing briefs.

The district court did not find that the arbitrator under-

stood and correctly stated the law but ignored it. Indeed,

the district court appeared unconcerned with the arbitra-

tor’s actual knowledge of the law. Instead, the district

court simply stated that the arbitrator knew of the muni-

cipal court conviction and should have given it dispositive

effect. Rather than examine whether the arbitrator under-

stood and correctly stated the law but ignored it, the

district court superimposed on the arbitrator full know-

ledge of and familiarity with the doctrine of collateral

estoppel and then set aside his award for failing to apply

that doctrine.

This is not the appropriate methodology or test. In

order to find manifest disregard of the law, a court would

* The Company persists in relying upon a statement made by

the state court judge, Judge Wiley, when he denied the Company’s

motion to restrain arbitration. In dictum, Judge Wiley stated that his

own “belief” is that once a court makes a fact determination,

whether it be made by a magistrate or state court judge, that would

be “the law of the case.” But Judge Wiley added that “I think the

arbitrator ought to determine these questions” an:1 he declined to

restrain the arbitration.

bo

RSD

be obligated to first determine if the arbitrator knew the

law but acted contrary to his knowledge; not whether he

should have known and understood the law. Plainly stated,

the arbitrator here did not act in manifest disregard of the

law.

Perhaps more important, res judicata and collateral

estoppel are not immutable principles of law which must

always be applied. For example, under a variety of cir-

cumstances courts have refused to apply them in situa-

tions where it would not disserve the principle of finality.

See, e.g. Crooker vy. United States, 620 F.2d 315 (1st Cir.),

cert. den., 449 U.S. 857 (1980); United States v. Agee,

D97 F.2d 350, 360 (8d Cur.) (en banc), cert. den., 442 U.S.

944 (1979); Garner v. Grarusso, 571 F.2d 1330, 1336 (5th

Cir. 1978); Tipler v. Du Pont de Nemours & Co., 4438 F.2d

125, 128 (6th Cir. 1971); United States v. Kwasniewski,

91 F. Supp. 847, $51 (.D. Mich. 1950). See also K. Davis,

Administrative Law Teat, §18.02 (8d ed. 1972).

Illustrative of the limitations on the breadth of res

judicata/collateral estoppel’s application is a recent de-

cision of New York’s highest court. Gilberg v. Barbieri,

d3 N.Y. 2d 285, 441 N.Y.S. 2d 49, 423 N.E. 2d S807 (Ct.

of App. 1981). In Gilberg the plaintiff and defendant were

involved ina seuffle. The plaintiff filed a complaint against

defendant, charging violation of §240.25 of New York’s

penal laws, which is a petty offense. A non-jury trial was

held in City Court, Mt. Vernon, New York, and defendant

was found guilty. The plaintiff then filed a civil suit for

assault and moved for summary judgment on lability,

based on the criminal conviction. The trial and appellate

court granted the motion, noting that the defendant had

a full and fair opportunity to litigate the matter and that

23

collateral estoppel pertained. The Court of Appeals re-

versed. The Court stated that the determination when

collateral estoppel should apply cannot be reduced to a

simple formula; the issue is not whether the prior judicial

proceeding was flawed, but whether it should be given con-

clusive effect. /d. 441 N.Y.S. 2d at 51. The determination

should be based upon the “realities of litigation,” including

the size of the penalty, the prior forum, the quality of

counsel, and differences in law. /d.*

Moreover, there are judicial and arbitral decisions hold-

ing that res judicata and collateral estoppel do not apply

to an arbitration. For example, in Village of Valley

Stream vy. Local 342, 89 A.D. 2d 1016, 454 N.Y.S. 2d 461

(App. Div. 1982), an employee of the Village/employer

was arrested on and pled guilty to charges of sexual abuse,

* Interestingly, the court remarked that to unhesitatingly accord

collateral estoppel effect to municipal court convictions could lead

to the unwanted result of plaintiffs bringing criminal charges before

instituting civil suits with the hope of obtaining a conviction and

then marching into civil court and quickly moving for summary

judgment. If these plaintiffs lose in criminal court they suffer no

harm, for they were not party to the criminal suit and the standard

of proof in the civil matter is lower, making a criminal acquittal

less fatal than a conviction would be for a defendant. /d. at 52

It is not difficult to imagine the same scenario employed by com-

panies in a labor setting. The rush to bring criminal charges and

have the state prosecute the case would be too inviting to pass up,

especially if a conviction meant a shortened and sure victory at

arbitration and an acquittal means nothing at all. The instant case

may well be an example of this very scheme. But this Court

need not concur with the New York court’s fears of abuse of the

criminal court system. The mere existence of the Gilberg decision

undermines the notion that the arbitrator manifestly disregarded the

law in declining to give collateral estoppel effect to a municipal court

conviction for a disorderly person’s offense.

24

a first-degree felony, and served 60 days in prison with

five years probation. After he pled, the employer fired

him and the employee grieved. While the grievance was

proceeding through the various steps on its route to arbi-

tration, the employee filed for unemployment benefits with

the state agency. A full hearing was held on the unemploy-

ment benefits claim and an Administrative Law Judge

ruled that the employee had violated the employer’s work

rules, and he was denied benefits. At the subsequent

arbitration of the discharge, the employer submitted the

unemployment agency’s decision as conclusive on the issue

of the violation of the work rules. Nonetheless the arbi-

trator ruled in favor of the employee.

The Appellate Division upheld the arbitrator’s decision

over the assertion that the agency’s decision was dis-

positive of the violation of the work rule. Refusing to

give the agency decision conclusive effect, the court ex-

plained:

In the within case, we are concerned with an arbi-

tration proceeding pursuant to the provisions of

a collective bargaining agreement, and it is conceded

that the grievance was within the scope of the

arbitration clause of such agreement. Accordingly,

the question of the res judicata effeet of the Un-

employment Insurance Administrative Law Judge

was properly for the arbitrator.

Vallage of Valley Stream, 454 N.Y.S. 2d at 462. Accord,

Application of Citizens of Day Care Center, Inc. vy. Com-

munity Social Agency Employees Union, 59 A.D. 845,

399 N.Y.S. 2d 10,11 (App. Div. 1977). See also Auzilliary

Power Corp. v. Eckhardt & Co., 266 F. Supp. 1020, 1023

25

(S.D. N.Y. 1966) (“{T]he question what effect should be

given the German [decision] is a question of interpretation

committed to the arbitrator.’’).

In addition, there are numerous arbitral decisions which

refuse to accord conclusive effect to criminal convictions.

For example, in Aldens Inc., 61 LA (BNA) 663, 665

(1973) the arbitrator, stressing the distinction between

arbitration and a court, stated:

No criminal proceeding may be submited to an

Arbitrator whose selection and whose authority is

derived solely from the provisions of a collective

bargaining agreement. A penalty for engaging in

a crime and/or a fine are prescribed by statute or

ordinance. In a criminal proceeding the issue is

whether an individual has violated a specific law.

And if found guilty, he is punished as directed by law.

Only courts of law, established and operating under

statutes and ordinances, have the right to determine

the innocence or guilt of an individual and to mete

out the appropriate penalty.

An arbitration proceeding involves an alieged

violation of one or more contractual provisions, the

interpretation and application of these provisions,

the alleged violation of a long established and ac-

cepted practice or any act arising out of the em-

ployer-employee relationship. And this is true in

an issue of employee termination.

* * *

Even an employee discharged for theft is entitled

to have his grievance considered in an arbitration

proceeding whether he was found innocent or guilty

26

for the same offense by a Criminal Court. An Arbi-

trator is not bound by the judgment in a criminal

proceeding or by an administrative agency. Sce

Kennicott Copper Co., 38 LA 93, ITT Continental

Baking Co., 72 ARB para. 8490, and Sperry Rand

Corporation, 72-2 ARB parap. 8568. Whether an

employee was discharged for just and proper cause

is a matter to be decided from the nature of em-

ployee-employer relationship from contract pro-

visions, from proper rules of conduct and from

established and accepted areas. (Hmphasis added).

Similarly, in ITT Continentai Baking Co., 72-2 ARB

(CCH) 78490 (1972) at 4700, the arbitrator stated that

“an Arbitrator who considers a case should not be bound

by a judgment of conviction or acquittal, or for that matter,

a determination by an administrative body, in deciding

the case befere him. [citation omitted }.”

Again, in an unreported arbitration decision published in

a basic text on arbitration, O. Fairweather, Practice and

Procedure In Labor Arbitration (2d ed. 1983), at 271-

72, the arbitrator stated:

the Court of Special Sessions made its findings

under the criminal code . .. The arbitrator must

make his findings under the contract and within

the rules of the forum over which he presides. He

‘annot be limited to the acceptance of the court’s

holding or acquittal as dispositive of the issues before

him. It can well be that one may not be guilty of

a crime and yet have conducted himself in a manner

that has given sufficient cause for discharge under

the collective bargaining greement. There can be

ictal ae oo en tt en nee

27

situations of conviciion of criminal conduct which

may not be sufficient to justify sustaining a dismissal

under a collective contract. The company in the

former and the collective bargaining representative

in the latter cannot be denied the opportunity to pre-

sent its own case in arbitration and as a matter of

contract application under the criteria agreed upon

by the parties. (mphasis added).

The foregoing judicial and arbitral decisions all stand

for the proposition that a judicial or quasi-judicial de-

cision need not, as a matter of law, be given collateral

estoppel or res judicata effect in an arbitration. None-

theless, the Company argues that the arbitrator acted in

manifest disregard of the law when he failed to give con-

elusive effect to the municipal court conviction. This is

simply not supported by the case law. Though collateral

estoppel may be central to the Company’s legal icono-

graphy, the existing law plainly does not preclude the

arbitrator from according the criminal conviction what-

ever weight or effect he deems appropriate.

The district court cited only one case in support of its

conclusion that the arbitrator must give dispositive effect

to the municipal conviction, and that was Dickinson v. Hein-

hold Securities, Inc., 661 F.2d 641, 644 (7th Cir. 1981).

That case is hardly convincing for that proposition. In

Dickinson the plaintiff and defendant brokerage firm had

an agreement, containing an arbitration clause, allowing

defendant to trade stocks for plaintiff. Plaintiff claimed

violations of the agreement, the defendant sought arbitra-

tion, and the plaintiff filed suit in federal court alleging

violations of federal securities laws, misrepresentation,

and tort and contract claims. The district court denied a

28

request for a stay of the court proceeding pending arbi-

tration and instead ruled that it would decide all ciaims,

beth the non-arbitrable and the arbitrable. The circuit

court reversed for various reasons, only one of which is

relevant here. The circuit court noted that one predicate

for the decision below was the (now defunct) “doctrine of

interwining” under which a court faced with arbitrable and

non-arbitrable claims which are inextricably entwined de-

cided all of the issues and denied arbitration. The circuit

court stated that arbitration could proceed and that the du-

plication of hearings was tolerable. As to this latter factor,

the court obliquely observed that where there is inextric-

able intertwining permeating the federal suit, the court

could make explicit and detailed findings of .fact Which

may be used in a subsequent arbitration between those

same parties. /d. at 644. But this is hardly support for

the conclusion that a municipal court trial for a disorderly

person's offense between the state and an employee must

be given dispositive in a subsequent labor arbitration

between the union and employer. Moreover, one must

approach the reasoning in Dickinson regarding the relation-

ship between a court proceeding and arbitration with ex-

treme caution in light of this Court’s recent rulings. See

Dean Witter Reynolds Inc. v. Byrd, 53° U.S.L.W. 4222

4224 and n.9 (Sup. Ct. March 4, 1985).

Nor do the cases cited in Dickinson support the idea

that an arbitrator must give dispositive effect to a

court decision. In Stockwell vy. Reynolds, 252 F. Supp.

215, 220 (S.D.N.Y. 1965) the court noted that a federal

court trial would “doubtless” have “bearing on the sub-

sequent arbitration. In New York Ass’n For Retarded

Children v. Carey, 456 F. Supp. 85, 96 (I.D.N.Y. 1978)

the court ruled that the parties to a labor contract bar-

29

gained for a decision by the arbitrator, not a court, despite

some New York cases holding that an arbitration award

has collateral estoppel effect on a subsequent civil action

brought by the same party as in the prior arbitration. In

Buffalo Forge Co. v. United Steelworkers, 428 U.S. 397,

412, 96 S. Ct. 3141, 49 L. Ed. 2d 1022 (1976) the issue was

whether one party to a labor contract with an arbitration

cause could obtain an injunction rather than arbitrate.

The Court answered this in the negative, emphasizing

that the parties contracted to arbitrate, not litigate. The

parties “have not contracted for a judicial preview of the

facts and law.” 428 U.S. at 411. In the sentence most

helpful to the Company here, the Court frowned upon

judicial interpretation of contracts, for they might differ

from the arbitrator’s interpretation and the arbitrator

might be heavily influenced or wholly pre-empted by the

court proceedings on the injunction. /d. 428 U.S. at 412.

Again, this remark does not rise to the level of a conclusion

that an arbitrator must give dispositive effect to a muni-

cipal court conviction. Indeed, the remark was made in

the context of a desire to retain the independence of the

arbitrators.

Even if these cases do provide some vague support for

the Company’s theory, they are more than counterbalanced

by the judicial and arbitral decisions cited above which

unambiguously hold that a labor arbitrator is xoé bound

by the prior conviction. The best that can be said for the

Company’s position is that it may have inferential founda-

tion in some cases, though it is manifestly contrary to

several judicial and arbitral decisions. But this hardly

justifies the vacatur of the award as in “manifest disre-

gard of the law.” Giving the Comany every benefit of the

doubt, there is simply no avoiding the conclusion that the

30

Company's perception of collateral estoppel and its relation

to arbitration is but one of several. That does not warrant

either the retroactive superimposition of this doctrine on

the award or its vacatur for manifest disregard of the

law.

Paraphrasing the Third Circuit, the Company got what

it agreed to in its contract—an award by an arbi-

trator selected pursuant to, and charged with determining

just cause under, that contract. The award in this case

correctly draws its essence from the contract and was

therefore properly upheld by the cireuit court. The Com-

pany’s effort to replace the arbitrator’s award with a

judicial determination is contrary to the law surrounding

and philosophy of labor arbitrations. In any ease, the

foregoing judicial and arbitral decisions make plain that

the arbitrator’s treatment of the municipal court con-

viction was not in manifest disregard of the law.

CONCLUSION

For all of the foregoing reasons, it is respectfully

submitted that this Court should deny the petition for

writ of certiorari.

Respectfully submitted,

ZAZZALI, ZAzzZALI & Know.

Attorneys for Respondents

By: Kenneru I. Nowak