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LABOR ARBITRATION AWARDS-THIRTY YEARS ...(1)
文/William B. Gould

JUDICIAL REVIEW OF LABOR ARBITRATION AWARDS-THIRTY YEARS OF THE STEELWORKERS TRILOGY: THE AFTERMATH OF AT & T AND MISCO [FNa]


William B. Gould IV
[FNaa]

Copyright by William B. Gould IV

 

I. Introduction

 

It is now almost thirty years since the United States Supreme Court, in its landmark Steelworkers Trilogy [FN1] decisions, promoted both the labor arbitration process itself and the finality to be given to labor arbitration awards. But the landscape of judicial review of labor arbitration is now more reminiscent of a thirty years' war than the substitute for strife once heralded.

The road to Steelworkers Trilogy and its statutory foundation, section 301 [FN2] of the Taft-Hartley amendments to the National Labor Rlations Act, [FN3] was a more abbreviated and convoluted path than that witnessed since June 20, 1960, the date of the Court's decisions. The former experience began, of course, with the regrettable and unfortunate judicial involvement in labor disputes under both common law [FN4] and the Sherman Antitrust Act. [FN5] The modern era of labor law caused the displacement of *465 that approach in favor of a brief interlude with judicial laissez-faire in the labor-management arena under the auspices of the Norris-LaGuardia Act of 1932. [FN6] Ultimately, the Wagner Act, as it was initially called, or the National Labor Relations Act of 1935, as it was eventually known, took an intermediate approach to judicial involvement. [FN7] That statute, which established a new National Labor Relations Board [FN8] in the form of an administrative agency, and provided for the Board's jurisdiction over both representation and unfair labor practice disputes, provided for a limited form of judicial review. [FN9] The Act viewed the Board as the repository of expertise in the field of labor law.

The Taft-Hartley amendments of 1947 provided, through section 301, that actions designed to enforce collective bargaining agreements could be heard in the federal courts-at least according to Textile Workers Union v. Lincoln Mills [FN10] in 1957-and the state courts as well. [FN11] The judiciary was now involved anew in labor disputes, notwithstanding the broad and unrepealed prohibitions against judicial intervention contained in the Norris-LaGuardia Act. [FN12] Although the Court's 1970 decision in Boys Markets, Inc. v. Retail Clerks Union, Local 770 [FN13] necessarily put the courts in the role of interpreting collective bargaining agreements, [FN14] Steelworkers Trilogy established the proposition that substantial deference *466 was to be given to arbitration awards-deference more considerable than that enjoyed by the Labor Board and by the trial courts themselves! [FN15]

According to the Court in Steelworkers Trilogy:

[A]rbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit. Yet, to be consistent with congressional policy in favor of settlement of disputes by the parties through the machinery of arbitration, the judicial inquiry under section 301 must be strictly confined to the question whether the reluctant party did agree to arbitrate the grievance or did agree to give the arbitrator power to make the award he made. An order to arbitrate the particular grievance should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute. Doubt should be resolved in favor of coverage.

. . . [I]n the absence of any express provision excluding a particular grievance from arbitration, we think only the most forceful evidence of the purpose to exclude the claim from arbitration can prevail, particularly where, as here, the exclusion is vague and the arbitration clause quite broad. Since any attempt by a court to infer such a purpose necessarily comprehends the merits, the court should view with suspicion an attempt to persuade it to become entangled in the construction of the substantive provisions of the labor agreement, even through the back door of interpreting the arbitration clause, when the alternative is to utilize the services of an arbitrator. [FN16]

In the interest of promoting what the Court viewed as the superior expertise (vis-à-vis the courts) of the arbitrators, and the arbitration clause as a quid pro quo for the no strike clause, [FN17] the Court also took the position that anything other than considerable deference to the arbitration award would make the process ‘meaningless' [FN18] because the award *467 would not be final, and the bargained for process would be eroded if the losing party could relitigate the issue in the courts. Justice Douglas stated:

[A]n arbitrator is confined to interpretation and application of the collective bargaining agreement; he does not sit to dispense his own brand of industrial justice. He may, of course look for guidance from many sources, yet his award is legitimate only so long as it draws its essence from the collective bargaining agreement. When the arbitrator's words manifest an infidelity to this obligation, courts have no choice but to refuse enforcement of the award. [FN19]

Yet thirty years after Steelworkers Trilogy, litigation continues-and indeed seems to increase-about the true meaning of those decisions. [FN20] Litigious wrangling over the enforcement of awards defeats one of the basic objectives of arbitration: the substitution of an expeditious and economical forum for judicial remedies. [FN21] My sense is that thirty years from now, absent a repeal of modern labor legislation [FN22] or enactment of statutes that provide for the creation of Labor Courts such as those which exist in Europe, the same kind of litigation, if not the identical issues involving the relationship between the judiciary and the labor arbitration process, will be in the courts.

The role of the labor arbitrator is as yet unsettled due to the essentially schizoid nature of American labor law. On the one hand, the American approach emphasizes, to a degree unknown elsewhere, the autonomy of the collective bargaining process and its labor arbitration component. [FN23] At the same time, however, ever since the National Labor Relations Act was enacted in 1935, that autonomous process has been augmented, and thus necessarily interfered with, by public bodies. This is particularly true in regard to labor arbitration since the Taft-Hartley *468 amendments made labor contracts enforceable in federal court. This is the lesson of Steelworkers Trilogy itself which straddles the labor policy promoting autonomous and free bargaining relationships and, on the other side of the fence, the public policy of intervention which resolves all doubts about arbitrability in its favor, notwithstanding the fact that traditional scrutiny of this contractual issue on its merits might produce a different result. There is simply no way out of the conundrum that these co-existing and contradictory frameworks for collective bargaining impose. All that the courts and arbitrators can do is to get their respective roles fixed as sensibly and carefully as possible. [FN24] This is an assignment not yet completed at the Supreme Court, or indeed, at any level of the judiciary today. Until this matter is resolved-and the present pattern of judicial reversal of arbitration awards diminished-one cannot help but find some measure of validity in Justice Frankfurter's view that ‘judicial intervention is ill-suited to the special characteristics of the arbitration process in labor disputes.’ [FN25]

 

II. The New Developments

 

As noted above, there is still considerable litigation involving both the finality of awards and questions relating to arbitrability, questions addressed by the Court in Steelworkers Trilogy. Here are some examples of the form that it takes.

Repeatedly frustrated in his efforts to gain a promotion despite a consistently good work record, a postal worker, who had filed a charge with the EEOC and then withdrawn it as the result of an agreement, fires gunshots at the Postmaster's empty parked car while off duty and damages the windshield, dashboard, and front seat of the car. The worker voluntarily confesses almost immediately thereafter and is dismissed, but the arbitrator reinstates him, taking into account ‘mitigating’ factors. [FN26]

*469 A mechanic, working for a Mercedes Benz dealership in Walnut Creek, California, receives a written warning that after installing a left rear tire, he had improperly tightened the lug bolts attached to the wheel, and that the left rear wheel had almost come off when the owner was driving at highway speed in San Francisco. The mechanic subsequently gets into an argument with the shop steward about the right way to tighten lug bolts. Then, after being warned that he must not disregard the instructions of the foreman, the mechanic replaces brake pads on the car of a customer who soon reports a very heavy ‘vibration’ in the front of the car as he drives home. Subsequent examination shows that three lug bolts were loose on the right front wheel and four lug bolts on the left front wheel were loose and the fifth was missing altogether. The mechanic in question was the only individual who worked on the car. The employee is dismissed for recklessness in replacing the lug bolts. The arbitrator reinstates him. [FN27]

During a layover, a pilot in command of a major airline carrier consumes a considerable amount of scotch whiskey as well as wine and beer and becomes, by his own admission, ‘extremely intoxicated.’ He testifies at an arbitration hearing that he could not remember anything that happened to him after 10 p.m. in the evening. The following morning he is unable to get out of bed in time to leave for the airport with the rest of the crew and the first officer has to assist him on board. The testimony is that his ‘eyes were glazed, his face was red and swollen, and he smelled strongly of alcohol.’ After a flight attendant's complaint, the cockpit voice recorder is deliberately disconnected in violation of FAA regulations, while the crew discusses what to do about the flight attendant's concern. The company dismisses him and he is reinstated by the arbitrator. [FN28]

A coal yard fuel equipment operator of a power company is stopped and arrested while off company time and while intoxicated. When the police search his car, they find cocaine, drug paraphernalia and a concealed weapon. The employee is charged with driving under the influence of alcohol and with cocaine possession, but subsequent to his arrest, he cooperates with law enforcement authorities in their drug investigations, and for 150 hours of community service work, the prosecutor drops the drug charges with a fine and temporary revocation of his driver's license. The company dismisses him and the arbitrator reinstates. [FN29]

An employee in a nuclear plant deliberately violates the company's security system designed to protect against the spread of radiation. The company dismisses him, and he also is reinstated, notwithstanding the *470 obvious hazard and threat posed to employees and the public. [FN30] In this, and all of the other cases described above, the losing party seeks judicial review of the labor arbitrator's award. [FN31] Articulation of the problem is made both vivid and dramatic if one hypothesizes that an arbitrator gives an employee responsible for the Valdez oil spill a reinstatement remedy, notwithstanding allegations (if they are proved before the arbitrator) that the employee was consuming alcohol on the job.

Also, a different, although not entirely unrelated, avenue for judicial involvement in labor arbitration has appeared. An employer, having negotiated a collective bargaining agreement with an arbitration clause in it, submits a dispute to an arbitrator, but simultaneously contests the arbitrator's jurisdiction over the dispute on the question of arbitrability. Subsequently the employer, having lost on both the arbitrability issue and the merits, moves to vacate the arbitrator's award in federal court on the ground that arbitrability is not for the arbitrator, but rather for the courts to decide, and that the arbitrator has usurped power reserved to the judiciary. [FN32]

These kinds of issues have arisen with increased frequency in recent years. But they are part of a longstanding pattern of disputes involving the proper role for the courts in judicial review of labor arbitration awards-a labor arbitration controversy which has been with us from the very first years of Steelworkers Trilogy onwards. [FN33]

As unions and employers squabble about arbitrability issues in the courts and losing parties in arbitration proceedings seek to vacate awards on the ground that the arbitrator did not have jurisdiction, the issue remains the same as it was in the 1960's: [FN34] Did the arbitrator's award draw *471 its essence from the collective bargaining agreement or was it inconsistent with public policy (an issue not directly addressed in Steelworkers Trilogy) and should it be therefore vacated or set aside? The intriguing aspect of all of this is that the law of labor arbitration, which has promoted both the exclusivity and finality of awards rendered by arbitrators, seems to have stated and settled clear principles for these past three decades. For it was in Steelworkers Trilogy that the Court created a presumption is favor of arbitrability by instructing the judiciary to resolve all doubts about the arbitrability of a dispute in favor of arbitration save for the presence of the most forceful evidence to the contrary in the form of bargaining history or contract language which would undercut the viability of such a conclusion. The idea behind this aspect of the Court's decision was that an autonomous system of self-government involving third-party neutrals who possessed expertise superior to that of a court (Justice Douglas went far beyond this point in fostering a laudatory mythology about arbitrators! [FN35]) was part of the bargain developed between the parties and could be furthered if the dispute was sent to an arbitrator whenever possible, that is, whenever there was a contractual basis for so doing.

Similarly, the Court in the last of the Trilogy, United Steelworkers v. Enterprise Wheel & Car Corp., [FN36] held that the courts were obliged to enforce the award, even when they disagreed with it, so long as it found its essence in the collective bargaining agreement which gave the arbitrator his or her authority. A mere ambiguity in the award does not suffice to vacate the award, said the Court, because that would encourage arbitrators to play it safe in writing their opinions and perhaps, as they are entitled to do, not to write an opinion at all! Again, the Court opted emphatically for the labor arbitration process on the ground that the arbitrators, the court of last resort in the parties' system of industrial self-government, knew infinitely more about the process and the agreements which resulted from it than courts could ever know.

*472 Related to all of this in all three of the Steelworkers Trilogy decisions was a concern that, if the courts became too deeply involved in the merits of the arbitrability issue as had New York, for instance, through the so called Cutler-Hammer doctrine, [FN37] they would become inevitably ensnared in the merits of the underlying grief itself. It was important for arbitrators, reasoned the Court, to have a wide berth because of the parties' expressed preference for arbitrators in the form of collective agreements giving the arbitrators a broad jurisdiction in which to exercise their expertise. As Justice Brennan-the Court's labor lawyer [FN38]-put in his concurring opinion, ‘ T he parties were generally more concerned with having an arbitrator render a decision as to the meaning of the contract than they were in restricting the arbitrator's jurisdiction.’ [FN39]

Justice Douglas, however, may have overstated arbitral expertise a bit, especially given that labor arbitrators appointed on an ad hoc basis must be frequently instructed in the complexities of new technology in an industry that they have not-and may not ever again-encounter. Yet the parties have bargained for the process. In any event, whatever the validity of his Steelworkers Trilogy commentary, if part of the objective was to eliminate or diminish challenges to arbitral awards, the mission is unaccomplished. Three decades later, the terrain of judicial review has become more complicated and confused.

The increasing number of challenges to the finality of arbitration awards, particularly by employwers, has prompted this comment from the Court of Appeals for the First Circuit:

It is a firm principle of federal labor laws that where parties agree to submit a dispute to binding arbitration, absent unusual circumstances, they are bound by the outcome of said proceedings. . . . Yet we are, with exasperative frequency confronted by challenges to such decisions brought by parties who are apparently still under the delusion that, as a matter of course, the losing party is entitled to appeal to the courts any adverse ruling by an arbitrator. [FN40]

But it is more than delusion on the part of defendants that is involved. Reaffirmance of Steelworkers Trilofy, and indeed expansion of the Trilogy's principles, albeit with new exceptions to the rule promoting finality of arbitration awards, has only invited more litigation and judicial contests. I submit that there are at least three basic reasons for these developments.

The first is the advent of civil rights legislation and other external law, and the Supreme Court's well-reasoned view that arbitration could *473 not dispose of employment discrimination claims [FN41] and that the courts could not accord arbitral decisions the same degree of deference and finality articulated in Enterprise Wheel. The reason for the Court's view, expressed for the first time in 1974, was that different issues and dissimilar processes were involved in courtroom hearings of anti-discrimination claims as opposed to arbitration proceedings-a view which has partially woven its way into the wrongful discharge Supreme Court decision rendered in 1988, Lingle v. Norge Division of Magic, Chef, Inc. [FN42]

In Lingle, the Court unanimously concluded that some wrongful discharge actions initiated by employees covered by collective bargaining agreements may be maintained notwithstanding the presence of grievance arbitration machinery, analogizing the public policy claims of employees raised in the wrongful discharge context [FN43] to congressional concerns manifested in Title VII of the Civil Rights Act of 1964 [FN44] and the Fair Labor Standards Act of 1938. [FN45] Simultaneously, duty of fair representation actions brought by employees who are disillusioned with the union's failure to process grievances [FN46] or the result obtained in an arbitration award [FN47] have increased, depriving employers of some of the benefits that they thought would flow from the union's sifting out of meritorious grievances, increasing thereby the cost of the arbitration process, [FN48] and thus presumably stiffening management's resolve against a broad and relatively open-ended jurisdiction for arbitrators.

A second and closely related development which has seemingly spawned an increased number of challenges is the rise of the new problems of the 1980's in the work place, that is, health and safety, [FN49] *474 toxic substances, and drug and alcohol abuse questions. [FN50] It is here that courts have become increasingly involved in reviewing arbitration awards on the grounds of public policy.

A third factor is the decline of unions and the number of employees covered by collective bargaining agreements, a development which has placed the unions in retreat where relationships are established and has simultaneously encouraged and emboldened employers to challenge arbitration awards and unions as well, thus stretching trade union resources further while the balance of power shifts against organized labor. Simultaneously, Judge Reinhardt of the Court of Appeals for the Ninth Circuit has expressed the view that the ideological terrain that has fostered divisions within the federal courts has influenced judicial review of labor arbitration awards [FN51] (though this has not yet translated itself into divisiveness in a Supreme Court which has promoted arbitration with near unanimity)-a factor which bears watching, for instance, in the case of Justice (then Judge) Kennedy's views on the subject while he was on the same circuit. [FN52]

*475 Judicially expressed exasperation of the kind articulated by the First Circuit notwithstanding, these factors have created more opportunities for the kind of judicial second-guessing against which the Court set its face thirty years ago in Steelworkers Trilogy. The Court, except in the area of employment discrimination, other external law and wrongful discharge actions, has in the main thus far attempted to reverse or at least retard this trend. This point is dramatized by its most recent pronouncements on the relationship between arbitration and the courts in 1987.

Finally, it is particularly ironic that the labor arbitration process is becoming more reviewed and regulated in this decade, just as parties in other relationships are looking to the labor arbitration process as a model through which wasteful litigation can be diminished. As alternatives to the judiciary are found elsewhere, the incentive to utilize what has been the most successful method of dispute resolution appears to be diminishing in the field of labor-management relations. [FN53]

 

III. AT & T and Misco

 

The new decisions of the Court are not profoundly or even substantially inconsistent with Steelworkers Trilogy. Indeed, it may be said that both areas of development-particularly those presented in Misco-are perfectly consistent with those landemark decisions. Yet, paradoxically, the Court's holdings have resulted in or at least been unable to stem more labor-management conflict in the courts and perhaps less before the arbitrators themselves.

The first of the recent cases is AT & T Technologies, Inc. v Communications Workers, [FN54] decided in 1986. Here, Justice White, writing for a unanimous Court, dealt with a union grievance challenging AT & T's decision to lay off seventy-nine installers from a Chicago based location. The union claimed that because there was no lack of work at the Chicago location, the layoffs would violate the collective bargaining agreement's provisions which established an order of layoff when a ‘lack of work necessitates the layoff.’ AT & T, however, laid off the workers and refused to submit the grievance to arbitration on the ground that its decision to institute the layoff was not arbitrable under its management prerogatives clause which proclaimed the right of management to manage its business and gave as an example the termination of employment. [FN55]

The district court held that the union's interpretation of article 20, which provided for layoffs in the event of lack of work, was at least ‘arguable’ and stated that it was for the arbitrator and not the courts to decide *476 the merits of the case. The court of appeals affirmed and stated that its understanding was that the arbitrator was to determine the threshold issue of arbitrability. While acknowledging the ‘general rule’ that this issue is for the courts unless the parties stipulate otherwise because of the potential for becoming entangled in the merits of the labor dispute under the guise of deciding arbitrability-a concern expressed in the Steelworkers Trilogy-the court announced an exception to the general rule under which the court could compel arbitration where the parties had not clearly excluded that matter from arbitration. [FN56] The Seventh Circuit's view was that the arbitrability issue could be remitted to the arbitrator without a judicial determination if consideration of arbitrability might ensnare the third party in the merits of the underlying grievance which gave rise to the arbitration proceeding.

On this issue, the Supreme Court reversed the Seventh Circuit. It reiterated its previously expressed view that arbitration is a matter of contract and that because arbitrators derive their authority to resolve disputes from the contract only when the parties have agreed in advance to submit such grievances to arbitration, the matter is ‘undeniably’ an issue for judicial determination. Said Justice White: ‘Unless the parties clearly and unmistakably provide otherwise, the question of whether the parties agreed to arbitrate is to be decided by the court not the arbitrator.’ [FN57]

Justice White went much further than this. The AT & T opinion stated that the ‘willingness of parties to enter into agreements that provide for arbitration of specified disputes' would be drastically reduced if an arbitrator had the power to determine his own jurisdiction. This result, said the Court, would undercut the ‘long standing federal policy of promoting industrial harmony through the use of collective bargaining agreements, and is antithetical to the function of a collective bargaining *477 agreement as setting out rights and duties of the parties.’ [FN58] The Court reasoned that, therefore, it was the district court's duty to resolve in the first instance the question of whether the matter should be submitted to arbitration.

A second decision, rendered in 1987, stems in part from the civil rights or external law line of cases involving arbitration; indeed it attempts to define more clearly the Supreme Court's 1983 decision in W. R. Grace Co. v. International Union of Rubber Workers, Local 759, [FN59] which was itself an employment discrimination controversy involving a perceived conflict between two arbitration awards. in W. R. Grace, the Court reiterated its view that the award must be based on the essence of the agreement and that a federal court may not ‘second-guess' the arbitral opinion. But the Court also stated that, as with any contract, a court could not enforce an award which was ‘contrary to public policy.’ Justice Blackmun, the author of W. R. Grace, stated: ‘Such a public policy, however, must be well defined and dominant, and is to be ascertained ‘by reference to the laws and legal precedents and not from general consideration of supposed public interest.’' [FN60]

But the Court did not articulate what it meant by all of this. Indeed, in a footnote, the Court was not even willing to venture the guess that a seniority provision in a collective bargaining agreement which might constitute a violation of Title VII of the Civil Rights Act of 1964 would itself be violative of the public policy standard adumbrated in W. R. Grace itself. [FN61]

In the wake of W. R. Grace, it seemed as though the floodgates to the federal courts had opened wide with numerous challenges to arbitral awards on public policy grounds pouring through, each possessing different theories as to what constituted the meaning of public policy. The Court, again speaking unanimously through Justice White in United Paperworkers International Union v. Misco, Inc., [FN62] attempted to stifle this tendency and to row an oar for arbitral finality.

Misco involved the dismissal of a night shift employee, Isaiah Cooper, who operated a slitter-rewinder machine which used sharp blades to cut rolling coils of paper. This operation was hazardous and had caused numerous injuries in recent years. Cooper was discharged as the result of a number of incidents. He had been reprimanded twice in a few months for deficient performance. After the second reprimand the police searched his house pursuant to a warrant and found a substantial amount of marijuana. Contemporaneously, a police officer was detailed to keep Cooper's car under observation at the company's parking lot. At about 6:30 p.m. Cooper was seen walking in the parking lot during work hours with two other men. The three men entered Cooper's car momentarily, then walked to another car and entered it. After the two other men returned to the plant, Cooper was apprehended by the police in the *478 back seat of the car with marijuana smoke in the air and a lighted marijuana cigarette in the front seat ashtray. The company also searched Cooper's own car and found a plastic scales case and marijuana greens. He was arrested and charged with marijuana possession.

When the company discovered that a marijuana cigarette was in the car in which Cooper had sat with two others, it dismissed him on the ground that his presence in the car violated the rule against having drugs on plant premises. Cooper filed a grievance which went to arbitration. At the time of the discharge and grievance filing, the company was not aware-and was not award until five days before the hearing itself-that marijuana had been found in Cooper's car itself. This fact did not become known to the union until the hearing began.

The arbitrator upheld the grievance and ordered the company to reinstate Cooper with back pay and full seniority. He based his conclusion on a finding that there was not just cause for dismissal inasmuch as the company had failed to prove that Cooper possessed or used marijuana. He precluded reliance upon the marijuana in Cooper's car because it was not used by the company as a basis for his dismissal. Therefore, the arbitrator, like many impartial third parties, would not allow the company to rely upon it as a basis for discharge.

The company filed suit in federal district court seeking to vacate the arbitration award on the ground that the reinstatement of Cooper was contrary to public policy. The district court agreed, given the company's general safety concerns regarding the operation of dangerous machinery by employees under the influence of drugs and considering the state criminal laws against drug possession. The award was thus vacated.

The Court of Appeals for the Fifth Circuit affirmed, [FN63] concluding that the award of reinstatement violated the public policy articulated by the trial court. The Supreme Court, without passing on the question raised by the union's position that a court may only refuse to enforce an award where the award itself violates a statute or regulation or ‘other manifestation of positive law’ or would compel employer violation of law, [FN64] stated that it would not sanction broad judicial discretion to set aside awards as against public policy. Said the court: ‘At the very least, an alleged public policy must be properly framed under the approach set out in W. R. Grace and the violation of such a policy must be clearly shown if an award is not to be enforced.’ [FN65]

AT & T and Misco have thus set the standard or, especially in the case of the latter decision, the most recent application of it. But they have not provided a complete, or even satisfactory, definitive application of that standard. The decisions do not resolve a host of issues which are raised or dramatized more clearly by some of the lower court decisions issued these past few years. Indeed, there are issues which the holdings have generated on their own initiative, particularly in the AT & T opinion. It is to these that I now turn.

 

*479 IV. The Unresolved Issues

 

A. The Steelworkers Trilogy Remand: The Arbitral Role

 

The first of many questions relates to the role of the arbitrator operating under a collective barganining agreement subsequent to a remand to him or her in a court ordered Steelworkers Trilogy arbitration proceeding. Under Steelworkers Trilogy it had sometimes been assumed that, since the courts were resolving all doubts about arbitrability, and therefore not considering the issue on its merits in a pristing sense, the way was still open for the arbitrator to consider substantive arbitrability as well as the merits of the case itself. In other words, the court, while making a preliminary determination that there was a consensual basis for proceeding, was not exploring the full merits of the arbitrability issue. Indeed, it could not do so. To do so, ran the reasoning of Justice Douglas in Steelworkers Trilogy, would push the judiciary over the precipice and into a seafilled with the underlying grievance's merits, an approach to arbitrability which was thus fueled by policy rather than contract considerations.

Indeed, the arbitrator in United Steelworkers v. Warrior & Gulf Navigation Co. [FN66] assumed this to be the case and considered the arbitrability issue de novo. [FN67] My own view is that this was the proper approach under the Steelworkers Trilogy. Subsequent to a judicial determination that a dispute was arbitrable, given the fact that the parties have bargained for the arbitrator's expertise and that the issue of jurisdiction has not been considered on its merits by the court under the standards of the Trilogy, arbitral review of the arbitrability issue is appropriate and necessary. The opposite view contends that arbitral reconsideration of the arbitrability issue is duplicative, especially when one considers res judicata type principles. Yet these arguments seem outweighed by the fact that the parties have bargained for arbitration and not judicial resolution as well as other policy considerations to which I have alluded.

Some of the cases which have followed in the wake of Boys Markets, Inc. v. Retail Clerks Union, Local 770, [FN68] in which the Supreme Court held by a five to two vote that injunctions were available in federal court under some circumstances for the violation of no strike clauses in collective agreements, have engaged in the same assumptions. [FN69] Indeed, Justice Stevens engaged in such a presumption in his persuasive dissent in Buffalo Forge Co. v. United Steelworkers. [FN70] In Buffalo Forge the Court declared *480 the Boys Markets' promotion of enforcement of the no-strike clause as a quid pro quo for arbitration inapplicable to sympathy strikes in which there was no underlying grievance appropriate for the arbitrator to resolve. Justice Stevens assumed that the arbitrator would be free to examine both the no-strike and arbitration clauses which the courts are required to review before issuing an injunction and that the arbitrator could give fresh consideration to the issue previously raised before the court. [FN71] Because of the narrow scope for judicial inquiry, particularly on the arbitrability issue, [FN72] there would be ample room for the exercise of arbitral jurisdiction in a remanded proceeding where, assuming an affirmative conclusion on arbitrability, the arbitrator would address the underlying merits of the dispute as well-be it the job classification dispute in Boys Markets or the allegations of no-strike clause violation in Buffalo Forge.

However, the Ninth Circuit has articulated a contrary rule relating to arbitral jurisdiction subsequent to a Steelworkers Trilogy remand. Said the court:

[I]f the evidence before the Court of purpose to exclude a particular claim from arbitration is not sufficiently forceful, the result is not . . . that the arbitrator must search for the truth at greater depth. The result, rather, is that the answer has been found and that the underlying dispute is arbitrable. [FN73]

This view was expressed with more emphasis, again by the Ninth Circuit, in the wake of the AT & T pronouncements on arbitrability and its special place in the judicial province. Said the court: ‘It is for the district court to decide whether the work transfer dispute is arbitrable. If it so decides, Frito-Lay is precluded from asserting lack of arbitrability in the ensuing arbitration proceeding.’ [FN74]

*481 To some extent, this point of view is supported by Justice Brennan's concurring opinion in Steelworkers Trilogy:

[A]lthough, the arbitrator may be empowered only to interpret and apply the contract, the parties may have provided that any dispute as to whether a particular claim is within the arbitration clause is itself for the arbitrator. Again the court, without more, must send any dispute to the arbitrator, for the parties have agreed that the construction of the arbitration promise itself is for the arbitrator, and the relucant party has breached his promise by refusing to submit the dispute to arbitration. [FN75]

Yet my own judgment is that this conclusion by the Ninth Circuit was clearly wrong prior to the Court's decision in AT & T. But, with the thrust of Justice White's views expressed in AT & T, and given the Court's rather sweeping and apocalyptic pronouncements on the arbitrability issue, it may now be impossible to argue that the arbitrator has any role whatsoever to play.

Thus far, the judicial approach to arbitral decision-making on a section 301 remand is tentative and cautious. This approach is best exemplified by the opinion of the Court of Appeals for the Third Circuit in Philadelphia in Morristown Daily Record v. Local 8N. [FN76] Here the grievance arose out of an opening in the employer's press room subsequent to its notification of a vacancy as required under the agreement. One of the bargaining unit employees sought the job, worked two shifts and alleged that on the third shift his dismissal was ordered. The union's grievance alleged that the employee was wrongfully discharged. The employer, however, refused to arbitrate on the ground that the employee had not acquired status as a regular journeyman within the meaning of the contract. The company maintained that the refusal to hire in these circumstances made the grievant an applicant for whom employment could be rejected without triggering arbitration.

The question thus was employment status; whether the employee was an applicant or an employee for the purpose of this aspect of the contract. The agreement provided that ‘rejections' of ‘applicants' could be grieved but not arbitrated. The court took the position that the district court must determine, by extrinsic evidence if necessary, whether this contractual provision relied upon by the company to deny arbitration applied to the preliminary determination of status, that is, applicant or employee, as well as to the act of rejection itself. If the question could be answered affirmatively, the disagreement over the term applicant would not be arbitrable and the court would determine the individual's status. A finding that the worker was an employee would send the case to an arbitrator. On the other hand, a conclusion that the individual was an applicant would end the matter in favor of the company. If the court was to find that the contract did not preclude arbitration of individual status it could then consider whether the company had produced ‘strong and *482 forceful evidence of the party's intention to remove the issue of status from the general arbitration clause.’ If the company met that burden the court itself would resolve the status dispute. If the employer failed to carry its burden, the narrow question of whether the individual qualified as an applicant should be sent to an arbitrator for determination.

The assumption throughout the court's opinion appears to be that a minuscule role for the arbitrator was left by AT & T. For the AT & T opinion assumes, without explication, that this issue is for the courts exclusively. Yet as the Third Circuit frankly acknowledged, ‘answering . . . [the] question [of arbitrability] may entail some probing of preliminary substantive issues.’ [FN77]

 

B. The Arbitral Role in Determining Arbitrability in The Absence of Judicial Involvement

 

There is a more fundamental problem which the Court does not directly confront or extensively discuss in AT & T, an issue which underlies Justice White's approach to the respective roles of the judiciary and arbitrators. It relates to an even more perplexing and vexatious aspect of AT & T, that is, the Court's assumption that the parties would not enter into collective bargaining agreements with arbitration clauses if the issue of arbitrability was in the hands of arbitrators rather than the courts. This result, according to the Court, ‘undercuts' the long-standing federal labor policy promoting industrial harmony through collective bargaining agreements.

Yet arbitrators frequently have resolved questions relating to jurisdiction in the absence of explicit contract provisions authorizing them to do so. [FN78] The Court's view that industrial harmony is inconsistent with this role for labor arbitrators comes as a considerable surprise to labor and management as well as third party neutrals. Moreover, the practical result of such an approach is to generate more litigation in the courts, the presumed antithesis of the objectives contained in Steelworkers Trilogy.

What then accounts for Justice White's views? The true origins of the Court's AT & T assumptions appear to be found in the writings of Professor Cox. [FN79] He concedes that a ‘strong’ case can be made for arbitral jurisdiction over the arbitrability issue itself. Yet he comes to the opposite conclusion. Said Professor Cox:

Reading the arbitration clause as an undertaking to allow the arbitrator to interpret that clause among others would economize time and effort. The evidence bearing upon questions of arbitrability is often relevant to the merits. The true nature of the claim may not be discernible until all the facts are in evidence. An appraisal of its character demands the same specialized experience with industrial relations as a decision on the merits. The principal purpose of an arbitration clause-to provide a specialized tribunal for the relatively informal development of the facts-would be implemented by the reading *483 the contract as a delegation of power to decide what disputes fall within its ambit.

Nevertheless, I am persuaded that the conventional arbitration clause is not an agreement which allows an arbitrator to interpret its meaning, thereby determining his own jurisdiction. The contrast between the wide-open clause and the conventional phraseology is too plain to put down to inadvertence. The appearent purpose [of the latter] is to confine the power of the arbitrator. Apparently the parties choose it because one party, usually the employer, distrusts arbitration at least to the point of insisting upon the inclusion of some safeguard against the arbitrator's imposition of significant obligations not contemplated by the agreement and quite beyond its scope. The clause does not tell what the arbitrator should not do. It tells what he cannot do. The protection sought by the employer would be drastically reduced by a construction which gave the arbitrator unlimited power to determine his own jurisdiction and merely warned against its exercise, for as a practical matter he would then have the power to impose obligations outside the contract limited only by his understanding and conscience. We can give effect to the underlying purpose only by excepting the interpretation of the arbitration clause from the general power to interpret, thus giving the court the duty to determine whether the claim which one side wishes to arbitrate gives rise to a dispute concerning the ‘interpretation and application’ of the collective bargaining agreement. [FN80]

There are, of course, obvious problems with arbitral resolution of the arbitrability issue. Furthermore, since the union initiates most grievances and therefore contends for arbitrability, it is likely that the employer would be more hostile to arbitral jurisdiction over this issue. Because the system is privately financed, the arbitrator has an obvious self-interest in resolving the arbitrability issue affirmatively. Some arbitrators will disqualify thesmelves from resolving the underlying grievance when the arbitrability issue is posed to them. [FN81] On the other hand, because such a process is bound to delay the entire proceeding, arbitrators frequently will resolve both issues, either in one proceeding or in a separate proceeding. The latter approach, of course, also serves to delay, although not quite as much as the disqualification approach.

It is difficult to determine whether Justice White was addressing this particular issue. There is no indication in AT & T itself. But it is this peculiar problem which singles out the arbitrability issue, separate and apart from the arbitral role in the resolution of other contractual disputes, that could produce the conclusion that arbitral intervention would undercut federal labor policy promoting industrial harmony through collective bargaining agreements. Again, the difficulty is that there is no explicit indication in the opinion. Even more troublesome, however, is the probability that Justice White's reliance upon Professor Cox's article reflects a broader position, that is, that the parties do not generally contemplate arbitral jurisdiction in this arena. Yet the view propunded by *484 Professor Cox and accepted by the Court in AT & T flies in the face of most parties' practices and understandings. The expectation in most relationships is that challenges to arbitrability can be lodged either with the arbitrator or the court under a clause which does not specifically address arbitral jurisdiction of the arbitrability issue. The parties generally accept arbitral resolution of this issue. [FN82]

Indeed, the view expressed in AT & T is directly contrary to what Justice Blackmun said for a unanimous Court just three years earlier in W. R. Grace: ‘Because the authority of arbitrators is a subject of collective bargaining, just as is any other contractual provision, the scope of the arbitrator's authority is itself a question of contract interpretation that the parties have delegated to the arbitrator.’ [FN83] If either party objects to arbitral resolution of the arbitrability issue, it may go to court for review under the standards set forth in Steelworkers Trilogy.

A final consideration weighing against both Professor Cox's views and AT & T is the disputed collective bargaining agreement itself. If, in fact, the issue of jurisdiction over the arbitrability issue is considerably more important to management, in contrast to all other contract provisions, and the employer expects that the issue will be resolved by the courts and not by the arbitrators, one would think that there would be some evidence of this in the collective bargaining agreement itself. In other words, where an issue is both of considerable consequence and basic to one side, that party would not leave the matter to chance, hoping the arbitrator would resolve ambiguities in its favor-especially when the exact opposite rule exists for all of the other agreements' provisions which might come before an arbitrator! In short, it seems odd that silence would be the way in which such an ambiguous and important issue would be addressed-particularly an issue which can arise so frequently. [FN84]

In any event, the AT & T Court earlier said that the issue could be for the arbitrator if the parties ‘clearly and unmistakably provide’ for that result. Quite obviously, contract language which specifically confers arbitral jurisdiction over the arbitrability issue itself will suffice under AT & T. My experience, however, reveals that arbitrability is not addressed explicitly in the collective agreement in a way which would definitively characterize it as within or without the arbitrator's jurisdiction.

Of course, it is always possible that the way is open, under broad arbitration clauses which are quite common and which refer to ‘differences' with respect to the agreement or ‘differences' with regard to the ‘interpretation and application of the agreement,’ to allow arbitrators to determine the arbitrability issue in the Steelworkers Trilogy-AT & T context. But the tenor of the Court's opinion in AT & T, as well as Justice Brennan's concurring opinion in Steelworkers Trilogy, especially given the result reached by all the Justices, seems to negate that view. It may be that the *485 only uncontested allocation of authority over the arbitrability issue-the reverse of the old General Electric [FN85] cases in which the parties explicitly encouraged judicial resolution of the arbitrability issue in the courts rather than through the arbitrator's jurisdiction-will occur where explicit authority is provided to the arbitrator.

Nevertheless, even within the confines of AT & T itself, the submission of the arbitrability issue to an arbitrator does constitute clear and unmistakable language that would allow the arbitrator to review the arbitrability issue and to require a reviewing court to defer to that determination. The Court of Appeals for the Third Circuit stated:

[W]ithout question the union and the employer were entitled to a judicial decision on the issue of arbitrability. Yet, we have no doubt that both parties could voluntarily decide, as they did here, to resort to binding arbitration as an alternative form of dispute resolution. Because an arbitrator's jurisdiction is rooted in the agreement of the parties, they may agree to submit even the question of arbitrability to an arbitrator. [FN86]

Thus, AT & T affects the question of arbitral jurisdiction subsequent to remand in Steelworkers Trilogy and the question of what the parties may do at their own initiative to resolve the arbitrability issue outside of litigation involving a motion to compel arbitration and judicial review of the arbitral determination under such circumstances. Additionally, although the AT & T holding does not bear directly on this, there are signs that some judges view the question of deference to arbitration awards with an increased willingness to examine contract language on this matter more carefully. The peril here is that which Justice Douglas foretold with Cassandra-like vision in Steelworkers Trilogy-an involvement with the dispute's merits under the guise of deciding arbitrability.

The cases are somewhat instructive. In Teamsters Local 315 v. Union Oil Co., [FN87] the Ninth Circuit confronted a union grievance arising out of a dispute between a company physician and an employee physician over an inactive employee's ability to return to work. The union filed a grievance alleging that the refusal violated seniority provisions which did not ‘specifically’ refer to disputes involving the physical fitness of employees to work. The court viewed the arbitration clause as ‘quite different’ from the sweeping terms of most broad standard form agreements because the clause specified that ‘only’ actions alleged to violate duties or obligations ‘expressed’ in ‘written’ provisions of the agreement were to be arbitrable. The management rights clause also spoke of specific provisions. *486 Since the seniority provisions of the agreement contained nothing about an implied ‘right to work,’ the court stated that to allow arbitration would violate the specific limits of the agreement. The court contrasted the broad arbitration clauses involved in Steelworkers Trilogy and AT & T. Moreover, the company relied upon bargaining history in which the company had insisted it determine disputes about the ability to perform a particular job for medical or physical reasons and the rejection of a union proposal to select a third physician in such instances. The court found this negotiation history persuasive as well.

Judge Pregerson dissented on the ground that the question posed by the union grievance required an interpretation of the extent of benefits flowing from express seniority provisions in the agreement. The dissent saw the differences between the scope of the arbitration clauses involved in AT & T and the Steelworkers Trilogy as inconsequential. For instance, Judge Pregerson stated that the arbitration clause in American Manufacturing Co. was properly read to apply to an express agreement. He also was of the view that the union's failure to obtain a third physician through its bargaining proposal did not mean that the company had absolute control over such matters.

I am of the view that Judge Pregerson's dissent is more persuasive than the majority opinion and attuned to the federal labor policy set forth in Steelworkers Trilogy. That position is more faithfully reflected in the Third Circuit's opinion in E. M. Diagnostic, [FN88] in which the court held that the arbitrator had appropriate jurisdiction if the subject matter grieved was in the ‘zone of interests that have received protection in the collective bargaining agreement.’ Other tests have all failed-as well as the ‘arguably’ standard contained in Misco itself. [FN89]

 

V. The Misco Progeny

 

The cases that have begun to dominate judicial challenges to arbitration awards are those involving public policy. Notwithstanding all of the statements that the Court has put to rest or diminished substantially judicial review problems, at this point it is fair to say that Misco has not realized that promise.

In the case involving the employee who had difficulty tightening lug bolts after tires were put on the car, Judge Noonan, writing for the Ninth Circuit, vacated the arbitrator's reinstatement of the worker and was quick to find a well-defined and dominant public policy [FN90] regarding automobile safety and maintenance in a variety of California statutes and regulations. Said the court:

*487 Discharge is not capital punishment. To employ or rehire a reckless auto mechanic does risk capital punishment of the driver of the car being serviced-and not only for the driver but for his passengers and for other motorists or pedestrians in the way then a front wheel falls off. [FN91]

Admittedly, this case moves a step beyond Misco in the sense that there was an arbitral finding that the employee had behaved improperly. All that one can say about the facts in Misco is that where there is smoke there is fire, and the arbitrator may have engaged in silly factfinding on this point! The district court and the Fifth Circuit simply disagreed with the arbitrator's conclusion that a discharge was too severe under the circumstances.

Similarly, the arbitrator's reinstatement of the drunken airline pilot was rejected on the ground that the arbitrator was not authorized to decide whether the employee, having been rehabilitated, could be rehired. [FN92] The court said that the fact that the former employee sought treatment for alcoholism after his discharge and subsequently controlled his drinking was irrelevant because of the public policy implications. The Court of Appeals for the District of Columbia was of a different view, stating that interference with the expert role of the arbitrator where, as here, the FAA had re-certified the pilot, would be ‘judicial chutzpah.’ [FN93] Yet some certifying agencies bend excessively to such exigencies as scarcity and the winds of political or institutional pressure. Some believe that this was true of the air controllers' strike of 1981. In the final analysis, judicial responsibility for public policy, albeit within the confines of parties' expressed preference for arbitral finality, cannot be abdicated.

The Court of Appeals for the Eleventh Circuit, dealing with an employee arrested for driving under the influence of alcohol and possessing cocaine, while stating its lack of enthusiasm for an arbitral award of reinstatement, refused to reverse on public policy grounds under the authority*488 of Misco. Judge Garza, dissenting, said: ‘There is no guarantee a drug dealer will stop at the gates of his employment. Water's co-employees represent the fertile market for a drug dealer.’ [FN94]

A whole host of decisions, including the Ninth Circuit's opinion involving the car mechanic, [FN95] clearly put the circuit courts on the side of Judge Garza in establishing broad judicial review of arbitration awards. But, at the other end of the continuum, like the above noted decision by the Court of Appeals for the District of Columbia, [FN96] are those addressing the issue on which Misco refused to express a view. [FN97] These decisions state that the only award which may be set aside on the grounds of public policy is one which requires an illegal act. [FN98] This goes much too far in diminishing the appropriate role of the courts in defining and fashioning public policy. [FN99] The argument for such an extreme view is that even where the parties themselves have authorized the arbitrator to decide issues of law the parties have bargained for an interpretation, whether erroneous or correct, and it ought to receive deference. I am not unsympathetic to this approach, having argued twenty years ago that arbitrators ought to be authorized to resolve public law issues where it is possible and practicable to do so, a view ultimately sanctioned and accepted by the Supreme Court through dicta in its 1974 Gardner-Denver opinion. [FN100]

But, where significant policy issues are involved arbitral interpretations of law in opinions which do not present adequate findings and reasoning can present difficulties and unavoidable conflicts between private decision makers and the courts. Moreover, if a certifying agency was to find that a drunken or drug produced stupor caused the Valdez oil spill, reinstatement of the guilty employee, whether by virtue of an arbitrator's award or a certifying agency's order, must be scrutinzed carefully by a *489 reviewing court. Common sense, let alone a proper application of the law of labor arbitration, requires no less, Inevitably, there will be conflict about where the authority for final resolution rests. Thus it seems unrealistic and unlikely that the courts will, or indeed ought to, fashion the same deferential approch contained in Enterprise Wheel in all circumstances. One of the difficulties involved in Misco and its progeny is that frequently both contract interpretation and the authority of the arbitrator are interwined with the public policy issue. The fact that AT & T has allocated arbitrability to the courts compounds the difficulties present in judicial review.

Some of the courts have read AT & T to provide judicial review of the arbitrability issue without the normal deference provided in Enterprise Wheel. [FN101] However, the Court in Misco said that ‘as long as the arbitrator is even arguably construing or applying the contract and acting within the scope of his authority, that a court is convinced he committed serious error does not suffice to overturn his decision.’ [FN102] This would suggest that, whatever the Court said about arbitrability in the context of a motion to compel in AT & T, judicial review is carefully circumscribed under the broad language in Misco.

The Court, in another portion of Misco, however, discussed the employer's contention that the collective bargaining agreement did not authorize arbitral reversal of the discharge of an employee once misconduct had been found. The Court noted that ‘normally’ an arbitrator is authorized to disagree with the employer's imposition of disciplinary sanctions. The Court said:

The parties, of course, may limit the discretion of the arbitrator in this respect; and it may be, as the Company argues, that under the contract involved here, it was within the unreviewable discretion of management to discharge an employee once a violation of Rule II.1 was found. But the party stipulated that the issue before the arbitrator was whether there was ‘just’ cause for the discharge, and the arbitrator, in the course of his opinion, cryptically observed that Rule II.1 merely listed causes for discharge and did not expressly provide for immediate discharge. [FN103]

Judge Breyer of the First Circuit appears to have relied upon this language to directly examine the merits of an agreement and to invalidate arbitral reversal of an employee's discharge where the agreement provided, in part, that the company reserves the ‘sole right’ to discharge *490 where ‘proper cause’ exists. [FN104] In this case, Warren II, [FN105] the court distinguished Misco and reversed the arbitration award because the contract contained language which, in the court's view, reserved the question of disciplinary sanction for the employer. As Judge Coffin noted in a concurring opinion, [FN106] the arbitrator in Warren II did not conclude that the language in the agreement relied upon by the majority ‘meant that . . . any violation of the rule would invariably be penalized with discharge.’ [FN107] Rather, Judge Coffin viewed the arbitrators' interpretation of the agreement to be that the language of the agreement was ambiguous, when considering the agreement in its totality. Because of this ambiguity, the arbitrator had an arguable basis within the meaning of Misco. But it seems clear that, given the majority view in Warren II, courts will be inclined to examine collective bargaining agreements on their merits and the bargained for interpretation will be ignored where the court's view is that the clear language of the agreement has been flouted by the arbitrator. Such will be done on the ground that either arbitrability is under examination or that the award simply does not possess the essence of the agreement.

Thus, the most ironclad limitations upon the Steelworkers Trilogy rule relating to judicial review can provide an escape hatch that is wider than it first appears. The move towards greater judicial review seems to be a misreading of both AT & T and Misco, and, in any event, wrong-headed in light of the reasons for promoting arbitration in Taft-Hartley, Lincoln Mills and Steelworkers Trilogy. Public policy considerations which are frequently*491 linked to the review of contract construction by the arbitrator, such as the allegation in Warren II that an employee had brought drugs on to company property, necessarily invite more judicial scrutiny. If this was not clear from the Court's opinion in Gardner-Denver-where Justice Powell, while conceding the important arbitral role in employment discrimination cases, nonetheless stressed the dramatic differences between contractual and statutory approaches, [FN108]-it is now made manifest by the Court's holding that courts may review the question of whether an employee's dismissal on public policy grounds possesses merit even where a collective bargaining agreement provides for final determination through arbitration. [FN109]

As Professor Bernard Meltzer has earlier argued, [FN110] it seems unlikely that the courts, now involved in the wrongful discharge public policy arena, will completely step aside when it comes to reviewing arbitrator's awards on public policy grounds whether arbitration clauses are present or not. Just as the courts are not limiting employee attacks upon employer dismissals in public policy cases to situations where the employer has violated the law-the Supreme Court of California has recently reserved judgment on this issue in its landmark Foley decision [FN111]-so also the courts cannot be similarly limited in their review of the parties' behavior where an arbitral interpretation of a collective bargaining agreement is involved.

On the other hand, the mere invocation of public policy cannot serve as a basis for defeating the expectations of labor and management, i.e., that arbitral expertise in the form of a final and binding opinion in the award is the bargain. It seems to me that the answer to accommodation between roles of the judiciary and the arbitrators-an answer in part suggested in Misco-is that there must be some basis in the form of the evidence in the record or the opinion itself for the arbitrator's determination with regard to whether reinstatement of the dismissed worker is warranted.

True, some of the best benefits of the arbitration process are its informality and speed, one of the facets of these characteristics being opinions and awards which need not be as detailed and elaborate as the findings of fact required of trial judges. Yet, where predominant public *492 policy considerations are involved, the arbitrator, notwithstanding what the Court said in Enterprise Wheel about the fact that arbitral opinions are not required in the labor arena, should cite chapter and verse with reference to the record as to the potential for and actuality of rehabilitation, and the basis for the arbitrator's conclusion that reinstatement is appropriate under the circumstances. Thus, some kind of factfinding is necessary, [FN112] notwithstanding the Court's previous pronouncement to the effect that labor arbitrators are not required to write opinions. [FN113]

Only one decision, by the Third Circuit Court of Appeals, [FN114] has addressed this issue. In that decision, Judge Sloviter stated that different considerations apply to the labor arbitration process and noted that a ‘statement of reasons or findings . . . helps to avoid judicial usurpation of administrative functions, assures more careful administrative consideration, and helps the parties plan their cases for judicial review.’ The absence of such a requirement indicated that the Virgin Islands' legislature, which had jurisdiction over the dispute before the court, could have provided for such a requirement. Since the issue is procedural, rather than substantive, the state legislature, at least in the first instance, is the appropriate forum for the rule which I propose, and not the Supreme Court through modification of Enterprise Wheel.

Some kind of finding is necessary in the car mechanic case with regard to the arbitrator's judgment concerning the potential for employee rehabilitation. For on the one hand, the parties have bargained for the arbitrator's expertise. On the other hand, the State of California has a genuine and overriding interest in protecting itself against incompetent employees. An arbitral conclusion which requires employee reinstatement*493 should properly specify or refer to those portions of the record upon which the promise of rehabilitation is based.

So long as the legislatures do not take action mandating arbitral fact-finding, the courts will vacillate between two implausible views. They may advocate a far-ranging involvement in the adjudication of arbitrable disputes on public policy grounds, or they may support the equally erroneous position that an arbiter's award may be reversed only where the law is violated. In these circumstances, the state legislatures, and, secondarily, the state courts, are best suited to assist the federal judiciary in adopting a proper standard of review for arbitration awards. Whether intended or not, the Supreme Court's 1957 pronouncement in Lincoln Mills-that federal substantive law is for the federal courts and procedural law is for the state-is the best approach to this vexatious issue.


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