United Paperworkers v. Misco, Inc., 484 U.S. 29 (1987)

United Paperworkers Int’l Union, AFL-CIO v. Misco, Inc.

No. 86-651

Argued October 13, 1987
Decided December 1, 1987
484 U.S. 29

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR

THE FIFTH CIRCUIT

Syllabus

Respondent employer’s collective bargaining agreement with petitioner union authorizes the submission to binding arbitration of any grievance that arises from the interpretation or application of the agreement’s terms, and reserves to management the right to establish, amend, and enforce rules regulating employee discharge and discipline and setting forth disciplinary procedures. One of respondent’s rules listed as causes for discharge the possession or use of controlled substances on company property. Isiah Cooper, an employee covered by the agreement who operated a hazardous machine, was apprehended by police in the backseat of someone else’s car in respondent’s parking lot with marijuana smoke in the air and a lighted marijuana cigarette in the frontseat ashtray. A police search of Cooper’s own car on the lot revealed marijuana gleanings. Upon learning of the cigarette incident, respondent discharged Cooper for violation of the disciplinary rule. Cooper then filed a grievance which proceeded to arbitration on the stipulated issue whether respondent had just cause for the discharge under the rule and, if not, the appropriate remedy. The arbitrator upheld the grievance and ordered Cooper’s reinstatement, finding that the cigarette incident was insufficient proof that Cooper was using or possessed marijuana on company property. Because, at the time of the discharge, respondent was not aware of, and thus did not rely upon, the fact that marijuana had been found in Cooper’s own car, the arbitrator refused to accept this fact into evidence. However, the District Court vacated the arbitration award and the Court of Appeals affirmed, ruling that reinstatement would violate the public policy "against the operation of dangerous machinery by persons under the influence of drugs." The court held that the cigarette incident and the finding of marijuana in Cooper’s car established a violation of the disciplinary rule that gave respondent just cause for discharge.

Held:

1. The Court of Appeals exceeded the limited authority possessed by a court reviewing an arbitrator’s award entered pursuant to a collective bargaining agreement. Pp. 36-42.

(a) Absent fraud by the parties or the arbitrator’s dishonesty, reviewing courts in such cases are not authorized to reconsider the merits of the award, since this would undermine the federal policy of privately settling labor disputes by arbitration without governmental intervention. The parties having agreed to submit all questions of contract interpretation to the arbitrator, the reviewing court is confined to ascertaining whether the award draws its essence from the contract and does not simply reflect the arbitrator’s own notions of industrial justice. As long as the arbitrator is even arguably construing or applying the contract and acting within the scope of his authority, the court cannot overturn his decision simply because it disagrees with his factual findings, contract interpretations, or choice of remedies. Pp. 36-38.

(b) The Court of Appeals was not free to refuse enforcement of the award simply because it considered the cigarette incident ample proof that the disciplinary rule had been violated, since no dishonesty is alleged here, and since improvident factfinding is hardly a sufficient basis for disregarding what the arbitrator appointed by the parties determined to be the historical facts. Nor is the arbitrator’s refusal to consider the evidence of marijuana in Cooper’s car a sufficient basis for nonenforcement, since the collective bargaining agreement largely left evidentiary matters to the arbitrator, whose decision on this point was consistent with the practice followed by other arbitrators of refusing to admit evidence which a discharging party did not rely upon. Assuming that the arbitrator did err on this point, his error was not in bad faith or so gross as to amount to affirmative misconduct. Moreover, his decision not to consider the disputed evidence did not forever foreclose respondent’s use of that evidence as a basis for discharge. Even if it were open to the court to find a disciplinary rule violation on the basis of that evidence, the court could not properly set aside the award because, in its view, discharge was the correct remedy, since arbitrators normally have wide discretion in formulating remedies. Although the agreement here may have limited the arbitrator’s remedial discretion by giving respondent the unreviewable right to discharge violators of the disciplinary rule, the proper course would have been remand to the arbitrator for a definitive construction of the contract in this respect. Pp. 39-42.

2. The Court of Appeals erred in setting aside the arbitral award on public policy grounds. A court’s refusal to enforce an arbitrator’s interpretation of a collective bargaining agreement is limited to situations where the contract, as interpreted, would violate "some explicit public policy" that is

well defined and dominant, and is to be ascertained by reference to the laws and legal precedents, and not from general considerations of supposed public interests.

W. R. Grace & Co. v. Rubber Workers, 461 U.S. 757, 766. An alleged public policy must be properly framed under the approach set out in W. R. Grace, and the violation of such policy must be clearly shown. Here, the court made no attempt to review existing laws and legal precedents, but simply formulated a policy against the operation of dangerous machinery under the influence of drugs based on "general considerations of supposed public interests." Even if that formulation could be accepted, no violation of the policy was clearly shown, since the assumed connection between the marijuana gleanings in Cooper’s car and his actual use of drugs in the workplace is tenuous, at best. It was inappropriate for the court itself to draw that inference, since such factfinding is the task of the arbitrator chosen by the parties, not the reviewing court. Furthermore, the award ordered Cooper’s reinstatement in his old job or an equivalent one for which he was qualified, and it is not clear that he would pose a threat to the asserted public policy in every such alternative job. Pp. 42-45.

768 F.2d 739, reversed.

WHITE, J., delivered the opinion for a unanimous Court. BLACKMUN, J., filed a concurring opinion, in which BRENNAN, J., joined, post, p. 46.