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High court considers whether courts can overturn arbitrators' decisions in labor disputes

In this story: The public policy argument Reluctance to overrule arbitrators The union's position Background of the case The company sues RELATED STORIES, SITES

By Raju Chebium
CNN.com Correspondent

WASHINGTON (CNN) -- In a case that seeks to clarify the power of the courts in labor disputes, a West Virginia coal company told the Supreme Court on Monday that courts should be able to overrule federal arbitrators whose decisions violate public policy.

John G. Roberts Jr., a lawyer for Eastern Associated Coal Corp., argued that case law and legal doctrine give the courts the power of judicial review, though courts have long been reluctant to meddle in labor disputes because they are considered the special province of federal arbitrators.

RESOURCES Read the lower court opinion at issue: Eastern Assoc. Coal Co. v. United Mine Workers of America (4th Cir. 1999)

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Roberts argued that two arbitrators erred in forcing Eastern Coal to reinstate a driver of 25-ton trucks who tested positive for marijuana in 1996 and 1997.

Because the driver was a risk to public safety, Eastern Coal fired him both times. But arbitrators overruled the company, saying the employer did not have "just cause" for such a severe penalty, Roberts noted. The company lost in lower courts.

The public policy argument

The company was justified in firing James Smith because federal laws and Department of Transportation regulations dictate that protecting public safety is a vital governmental concern, Roberts argued in Eastern Associated Coal Corp. v. United Mine Workers, District 17,.

Therefore, the lower courts should have overruled the arbitrator on the grounds that the company had public policy reasons to fire Smith, Roberts said.

"How do other drivers who failed this test take it seriously" if they know that the courts will never go against an arbitrator, Roberts asked.

Justice David Souter asked Roberts if Congress were so greatly worried about public safety why did lawmakers not spell out a "two-strikes-and-you-are-out" policy for truck drivers who abuse drugs.

"The indeterminacy of this is what bothers a lot of us," he said. "An arbitrator's decision is entitled to great deference."

Roberts replied: "I suppose that's because Congress did not think an arbitrator would reinstate someone with two positive drug tests in 15 months."

Reluctance to overrule arbitrators

The Supreme Court has long favored the resolution of labor disputes by arbitration. In cases over the past 40 years, the high court has given the courts "excruciatingly limited" powers of judicial review over arbitrators' decisions, said John Cannon, a labor law expert at Villanova University.

"The Supreme Court, however, has created one major exception to this policy of judicial deference to arbitration," he wrote in an analysis of the case for the American Bar Association. "It has held twice ... that a court may not enforce an arbitrator's award that is contrary to public policy."

It was under this exception that Eastern Coal decided to turn to the courts to overturn arbitrators' rulings to reinstate Smith.

The union's position

Union lawyer John Mooney said the arbitrator did consider public policy issues while deciding whether Smith should be fired or reinstated.

"This is the sort of thing numerous arbitrators ... do," he said, adding that the court does not need expanded powers of judicial review because arbitrators have the requisite "specialized judgement."

Under DOT regulations, truck drivers who test positive should be suspended -- as Smith was -- and then allowed to undergo drug treatment and return to work as rehabilitated individuals -- the arbitrators' decisions both times Smith tested positive, Mooney argued.

Therefore, he said the public policy criteria were reviewed and applied correctly, he said.

Background of the case

Smith failed two random drug tests, which are required under 1994 DOT guidelines for commercial vehicle drivers.

Eastern Coal fired him both times, invoking the National Bituminous Coal Wage Agreement, a collective bargaining pact the company and the union agreed to abide by in personnel matters. The wage agreement says employees can be fired for "just cause" but does not define that phrase, Cannon said.

Further, under the company's substance-abuse policy, employees who test positive for drugs must be removed "from any safety sensitive position" and could be fired, court papers show.

Arbitrators reinstated Smith after suspensions both times, ruling the company failed to prove "just cause" to let him go.

The union argued that neither the company policy nor DOT rules called for automatically firing workers with substance-abuse problems.

Union officials also noted that the two positive drug results were the only blemishes in Smith's 17-year history with Eastern Coal, according to court rulings.

The company sues

The company sued in West Virginia federal court, alleging that federal and state public-safety legislation justified Smith's dismissal.

In court papers, the company cited The Omnibus Transportation Employee Testing Act of 1991, which said "the greatest efforts must be expended" to eliminate substance abuse on or off the job by workers operating trains, aircraft, buses and trucks.

In September 1998, U.S. District Judge John T. Copenhaver Jr. ruled that the arbitrator had not exceeded his authority and upheld Smith's reinstatement order.

In its May 1999 appeal to the Fourth U.S. Circuit Court of Appeals in Richmond, Virginia, Eastern Coal raised the public policy issue again, arguing that the trial court was essentially complicit in violating state and federal policy by refusing to overturn the arbitrator, court papers show.

But the company lost again. Without explaining why, the appeals court in an August 1999 unpublished opinion affirmed the lower court decision, merely saying Copenhaver "correctly decided the issue before it."

Cannon said an unpublished opinion means the court's ruling cannot be used as precedent in future cases. He said courts have the power to decide which opinions to publish, adding that courts generally do not publish opinions that are narrow in scope and applicable only to the case in hand.

The Supreme Court accepted the case in March.

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United Mine Workers of America
American Arbitration Association
Supreme Court of the United States

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