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

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition Brief
- **Published:** January 1, 1986
- **Citation:** 475 U.S. 1085

## Text

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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
EPA EEDA in NOTED eR ITS il
RAIL: SIMU schcisshtsicciak netentecmaptin blac poocennamanmnamabcaaeaie 2
RES Seige tl Leven nea iee ONE A eae Re PRPS tr 2
de ee. RERUN IF i HOME NaS 2
gt 5, ee re Nap AAs ety Sin nae eee RIS Dros 5)
SOS, 0 SN GR ass one ae tdacetsersincclnnbone dD
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

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385018_1432%3A2. Public record. Not legal advice.