A blog for employment lawyers, human resources professionals, and union representatives.
This page contains entries under the topic: "Court review of award" | Main
August 06, 2005
Manifest disregard for the law
"Manifest disregard for the law" is an issue that rarely comes up when courts review arbitration awards, especially in the context of a collective bargaining agreement.
The company fired an employee for excessive absences. The union grieved arguing that the last absence should have been excused because it qualified as FMLA leave. The collective agreement expressly incorporated the requirements of the FMLA.
The arbitrator reinstated the employee, finding that the absence was FMLA-qualified.
The company tried to overturn the arbitrator's award, claiming the arbitrator exhibited a manifest disregard for the requirements of the FMLA. Specifically, the argument was that the employee's illness did not render her unable to work.
The court affirmed the award, Electrolux v. UAW (8th Cir 08/05/2005), saying:
- The evidence "shows at most that the arbitrator committed an error in judgment, and mere error by the arbitrator is not a basis for reversal."
- The decision, "while possibly erroneous, drew its essence from the collective bargaining agreement, and we must enforce his award."
My view:
- Correct decision.
- Technically, analysis of "disregard of the law" should be used only when an arbitrator is directly interpreting the law, such as in an individual arbitration where an employee claims that the employer violated the FMLA. Here, the FMLA was incorporated into (and became part of) the contract, so the question is whether the award drew its essence from the contract. Same result either way.
Posted August 06, 2005 by Ross Runkel, Editor at LawMemo, publisher of Employment Law Memo. Try it.
July 18, 2005
"Reverse" discrimination violates public policy
Arbitration awards will not be enforced if they violate public policy. "Clear" public policy, that is. And it's not always clear whether the public policy is clear, and that split the 8th Circuit 2 to 1.
Federal law does not prohibit employers from preferring older workers over younger ones. State law can, and Minnesota law does prohibit older worker preferences.
A collective bargaining agreement required 1 out of every 5 electrical workers in a unionized shop to be 50 years of age or over. The employer let go two over-50 employees as part of a reduction in force. The union filed a grievance, which went to arbitration.
The arbitration panel ruled that the employer violated the agreement by not maintaining the 1-to-5 ratio, and awarded lost wages to the two employees.
The 8th Circuit held (2-1) that the arbitration award could not be enforced because it violated public policy - a rare outcome. The public policy was found in the Minnesota Human Rights Act. That statute, says the court, "prohibits using a person's age as a basis for a decision if the person is over the age of majority." Ace Electrical Contractors v. IBEW (8th Cir 07/14/2005).
The dissent would have upheld the arbitration award under the usual highly deferential rules for reviewing such awards, noting that "the law of Minnesota simply does not provide the clarity necessary to invoke the public policy exception.
My view:
- A reminder that federal and state law can be quite different on important questions of employment discrimination law.
- This case is an unusual example of a court refusing to uphold an arbitration award, on the ground that the award violated public policy.
Posted July 18, 2005 by Ross Runkel, Editor at LawMemo, publisher of Employment Law Memo. Try it.
June 07, 2005
Teamsters v. Continental: Certiorari?
I have previously criticized [here] the 5th Circuit's decision in Continental Airlines v. Teamsters (5th Cir 11/15/2004) because that court intends to continue being a renegade - correctly reciting the rules on judicial review of arbitrator awards and then refusing to apply them.
Teamsters filed [here] a petition for certiorari in the US Supreme Court, and Continental has filed [here] its reply. The issue now is whether the Supreme Court will consider this case worthy of its time and attention.
My view: The 5th Circuit was spanked in Paperworkers v. Misco, 484 US 29 (1987), and it's time for another one.
The Supreme Court will get excellent lawyering on both sides:
For Continental: Teresa Valderrama and Jarod D. Bonine of Baker Botts.For Teamsters: Roland P. Wilder Jr. and William R. Wilder of Baptiste & Wilder
Posted June 07, 2005 by Ross Runkel, Editor at LawMemo, publisher of Employment Law Memo. Try it.
April 04, 2005
Reinstatement violated public policy
An arbitrator ordered reinstatement of a police officer whom the City discharged for egregious and outrageous misconduct toward a civilian followed by filing a knowingly untrue statement and providing a distorted version during an internal investigation. Oh, and let's add that the officer gave phony testimony at the arbitration hearing.
The arbitrator reduced the penalty to a one year suspension on the time-honored ground that the City had meted out penalties short of discharge for similar or more serious conduct.
The trial court and Court of Appeals were satisfied that the arbitrator's award should be confirmed, "albeit with a lack of enthusiasm."
The Massachusetts Supreme Judicial Court vacated the arbitrator's award on the ground that it violated public policy. City of Boston v. Boston Police Assn (Massachusetts 04/04/2005).
The court reasoned that an arbitrator cannot "order a party to engage in an action that offends strong public policy." Sounds like a high threshold, but later the court put it this way: The City must demonstrate that the officer's conduct was such that a penalty less than discharge "would frustrate public policy."
A statute prohibits appointing to a police officer position anyone "convicted of any felony." The fact that the officer was not convicted of a felony was "beside the point" because it is the conduct rather than the conviction that is determinative.
My view: I won't beat up on the arbitrator or the Massachusetts court. It's enough to point out that the parties picked arbitration and picked the arbitrator, and there was no showing that the arbitrator's award required the City to perform any unlawful act.
Posted April 04, 2005 by Ross Runkel, Editor at LawMemo, publisher of Employment Law Memo. Try it.
Arbitrator went outside the contract
Can an arbitrator rely on an employer's rules that are not incorporated into the collective bargaining agreement? Maybe not, in Ohio.
The facts were simple in Cincinnati v. Queen City Lodge (Ohio Ct App 04/01/2005). A police officer lied during a criminal trial, the City discharged him, and he grieved under the collective bargaining agreement. An arbitrator reinstated him and imposed a three day suspension.
The arbitrator's reasoning was simple. The City could discipline or discharge an officer for just cause, and the City had just cause to discipline this officer. The City's Rules Manual provided for a one to three day suspension for a first time violation of the rule prohibiting giving misleading information. Therefore, the arbitrator reduced the penalty to a three day suspension.
The Ohio Court of Appeals concluded (2-1) that the arbitrator's decision did not draw its essence from the collective bargaining agreement, and held that the arbitrator's award should be vacated. This was because the arbitrator relied on a source outside the agreement, and there was no "rational nexus" between the agreement and the award.
My view: This case is a lesson on how an arbitrator should write an opinion. Always make it clear that the reasoning is rooted in the contract. There should be nothing wrong with referring to outside documents such as the employer's rules. But the Ohio court noted that this arbitrator relied entirely on the employer's rules. Why couldn't the judges see the connection between the rules and the contract? Because the arbitrator did not explain the connection.
Posted April 04, 2005 by Ross Runkel, Editor at LawMemo, publisher of Employment Law Memo. Try it.
March 20, 2005
A frolic of its own
What to do with a federal Circuit Court that is grossly insubordinate to the will of Congress and instructions from the US Supreme Court?
The 5th Circuit in Continental Airlines v. Teamsters (5th Cir 11/15/2004) made it clear that it intends to continue to be a renegade - reciting the rules correctly and then refusing to apply them.
On March 14 the union filed a petition for a writ of certiorari asking the Supreme Court to bring the Circuit back into line.
Brief facts:
Employee Johnson was on a last chance agreement and an EAP agreement. The company discharged him because he tested positive for alcohol. The union grieved and the dispute went to an Adjustment Board - an arbitration board provided for by the Railway Labor Act. The agreements disallowed any use of alcohol, and required Johnson to notify the company "if your doctor prescribes medication that contains alcohol." Johnson took cough medicine on instructions from his doctor's staff, and notified the company. The Board held that he had complied with his agreements and ordered him reinstated.
The 5th Circuit's decision:
Because there was no evidence that Johnson ever saw his doctor or that the doctor's staff consulted with the doctor, "Johnson's doctor never approved the use of cough medicine." The Board's "interpretation is not an arguable construction of the agreements" because "the Board's interpretation effectively reads 'doctor' out of the EAP agreement."
What's really happening here:
Rebellion, pure and simple. The 5th Circuit (1) recited the correct standard of review, and then (2) reversed the Board on its findings of fact and (3) reversed the Board on its interpretation of the agreement.
The 5th Circuit is a recidivist.
Paperworkers v. Misco, 484 US 29 (1987), came from the 5th Circuit. There the Supreme Court chose the strongest possible words about court review of arbitrators' factfinding and contract interpretation. (1) There is no court remedy for an arbitrator's "improvident, even silly factfinding." (2) "The courts ... have no business weighing the merits of the grievance, considering whether there is equity in a particular claim, or determining whether there is particular language in the written instrument which will support the claim." [Quoting Steelworkers v. American Mfg, 363 US 564 (1960)]
What's at stake?
(1) The structure Congress created for resolving disputes in the rail and airline industries, and the arbitration systems in use in other industries. If the 5th Circuit continues substituting its own version of the facts and its own interpretation of agreements, then these systems will be wrecked. Cough syrup grievances will be resolved in the courthouse instead of by arbitrators - flouting the will of Congress and needlessly adding to judicial workloads. (2) The rule of law. The 5th Circuit's defiant approach of paying lip service to the rules and then refusing to follow them undermines the rule of law, the supremacy of Congress in law-making, and the supremacy of the Supreme Court in the federal judicial system. Yuck!
Posted March 20, 2005 by Ross Runkel, Editor at LawMemo, publisher of Employment Law Memo. Try it.
