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The refusal of courts to review the merits of an arbitration award is the proper approach to arbitration under collective bargaining agreements. The federal policy of settling labor disputes by arbitration would be undermined if courts had the final say on the merits of the awards.
The Artists Agency began representing plaintiff Kelsey Grammer in the 1980s, representation that included both Grammer's television and motion picture projects. Subsequently, Grammer sought modification of his Artists Agency contract so that he could seek alternative representation for potential theatrical motion picture projects. After some negotiation, Grammer and Artists Agency agreed in January 1995 that, in exchange for Grammer's extending for two years his television and commercial obligations to Artists Agency, Artists Agency would substantially release Grammer from his theatrical motion picture obligations (the "settlement agreement") (collectively, the "1995 agreements"). The 1995 agreements were accepted by the Screen Actors Guild ("SAG"). In 1996, Grammer terminated his relationship altogether with Artists Agency and, in August 1998, Grammer stopped paying commissions to Artists Agency. Grammer denied any obligations to Artists Agency, arguing that the 1995 agreements violated Rule 16(g) of the collective bargaining agreement ("CBA") among SAG, the Association of Talent Agents ("ATA"), and the National Association of Talent Representatives. The arbitration panel determined that the 1995 agreements were valid, that Artists Agency had enforceable rights pursuant to those 1995 agreements. According to the panel, while it was not disputed that the Settlement Agreement effected a transaction that was at variance from Rule 16(g), counsel for Artists Agency had de facto granted a waiver of that variance after reviewing the settlement agreement, determining that Grammer's interests were both furthered and protected by legal counsel, and accepting the renewal contracts and settlement agreement for filing with SAG. The district court confirmed the arbitration award. Grammer appealed, arguing that the arbitrators made factual findings unsupported by the record and that they exceeded their jurisdiction.
Did the district court err in confirming the arbitration award?
The district court's order confirming the arbitration award was affirmed. According to the court, the labor arbitration panel acted reasonably in concluding that the actors waived violations of the CBA, that a representation contract existed between the actor and the artists agency from January 1995 to March 1996, and that an award of commissions on consulting fees was permitted under the CBA. The arbitration panel's decision to enforce the agreements was a reasonable interpretation of the CBA.