United Paperworkers International Union v. Misco, Inc.
484 U.S. 29 (1987)
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Rule of Law:
A court may not set aside a labor arbitration award on public policy grounds unless the award violates an explicit public policy that is well-defined and dominant, ascertained by reference to laws and legal precedents, not from general considerations of supposed public interests. A court cannot engage in its own fact-finding to establish a violation of such a policy.
Facts:
- Misco, Inc. operated a paper converting plant and was party to a collective-bargaining agreement with the United Paperworkers International Union.
- The agreement reserved Misco's right to enforce rules, including one prohibiting the possession or use of narcotics on plant property, which was a cause for discharge.
- Isiah Cooper, a Misco employee, operated a hazardous slitter-rewinder machine.
- Police conducted a search of Cooper's house and found a substantial amount of marijuana.
- On the same day, police observed Cooper in the company parking lot during work hours, sitting in the backseat of another person's car.
- When police apprehended Cooper in the car, the air was filled with marijuana smoke and there was a lit marijuana cigarette in the front-seat ashtray.
- A subsequent search of Cooper's own car in the lot revealed a plastic scales case and marijuana gleanings.
- Based on Cooper's presence in the car with the lit cigarette, Misco discharged him for violating the rule against having drugs on plant premises.
Procedural Posture:
- The Union filed a grievance protesting Cooper's discharge, which proceeded to arbitration.
- The arbitrator found that Misco lacked 'just cause' for the discharge, refused to consider evidence not known to Misco at the time of discharge, and ordered Cooper's reinstatement with backpay.
- Misco, Inc. filed suit in U.S. District Court to vacate the arbitration award.
- The District Court set aside the award, holding that reinstatement was contrary to public policy.
- The Union appealed to the U.S. Court of Appeals for the Fifth Circuit, where Misco was the appellee.
- The Court of Appeals affirmed the District Court's judgment.
- The Supreme Court granted the Union's petition for a writ of certiorari.
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Issue:
Does a federal court's authority to vacate a labor arbitration award on public policy grounds permit it to overturn an award based on general considerations of public interest, rather than on a violation of a specific, well-defined, and dominant public policy derived from laws and legal precedents?
Opinions:
Majority - Justice White
No. A court's authority to vacate a labor arbitration award on public policy grounds is narrowly circumscribed and does not permit overturning an award based on general public interests. Judicial review of an arbitrator's decision is extremely limited; courts are not authorized to reconsider the merits of an award, re-weigh evidence, or substitute their own factual findings for those of the arbitrator, as long as the award 'draws its essence from the collective bargaining agreement.' The public policy exception, established in W. R. Grace & Co. v. Rubber Workers, requires that any policy must be 'well defined and dominant' and ascertained 'by reference to the laws and legal precedents,' not from 'general considerations of supposed public interests.' The Court of Appeals erred by formulating a public policy based on general safety concerns and by engaging in its own fact-finding to conclude that Cooper's reinstatement would violate that policy. The connection between marijuana found in Cooper's car and potential on-the-job impairment was a factual inference for the arbitrator, not the court, to make.
Concurring - Justice Blackmun
No. I join the Court's opinion but write to underscore the narrowness of its holding. The Court correctly reverses the Court of Appeals on three grounds: 1) the lower court exceeded its authority by second-guessing the arbitrator's factual findings and choice of remedy; 2) even accepting the facts, the link between them and a violation of the alleged public policy was too tenuous; and 3) the public policy itself was improperly formulated from general concerns rather than specific laws and precedents as required by W. R. Grace. This opinion does not decide the broader issue of whether a public policy must be grounded in positive law to justify vacating an award; it merely holds that compliance with the W. R. Grace framework is a necessary, but not necessarily sufficient, condition for doing so.
Analysis:
This decision significantly reinforces the principle of judicial deference to labor arbitration established in the Steelworkers Trilogy, thereby strengthening the finality and authority of the arbitration process. It narrows the public policy exception, making it substantially more difficult for a party to challenge an adverse arbitration award in court on such grounds. The ruling mandates that courts must identify a specific, well-defined public policy rooted in positive law, rather than relying on general notions of safety or public interest. By prohibiting courts from engaging in their own fact-finding to support a public policy claim, the decision solidifies the arbitrator's role as the exclusive finder of fact in disputes arising under a collective bargaining agreement.
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