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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. As long as the arbitrator's award draws its essence from the collective bargaining agreement, and is not merely his own brand of industrial justice, the award is legitimate.
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.
Did the courts have authority to review the merits of an arbitration award reached under a collective bargaining agreement?
The court held that courts were without authority to review the merits of an arbitration award reached under a collective bargaining agreement. As long as arbitrator's award had drawn its essence from the collective bargaining, and not the arbitrator's own brand of industrial justice, the award was legitimate. Therefore, the arbitrator's determination to reinstate the employee should not have been vacated based upon allegedly improvident fact-finding, the failure of the arbitrator to consider evidence unknown to the company at the time that the employee was fired, or purported public policy concerns. The parties had bargained for arbitration to settle disputes and were free to set procedural rules. The arbitrator's refusal to consider disputed evidence was not in bad faith or so gross as to amount to affirmative misconduct. Public policy concerns should have been measured with reference to law and legal precedent, and not general considerations of supposed public interest.