Sierra Pacific Power Company v. International Brotherhood of Electrical Workers Local 1245, 3:14-cv-00441

NV Energy (petitioner) and IBEW Local 1245 (respondent) are parties to a collective bargaining agreement (CBA) requiring binding arbitration of grievances; the arbitrator’s conclusions are final and binding.
Victor Parker, a control room operator and CBA unit employee, was discharged in 2011 for racially offensive remarks and prior misconduct; Local 1245 filed a grievance and arbitration ensued.
Arbitrator Matthew Goldberg heard three days of testimony and exhibits; key employer evidence rested on one witness, John Hernandez, whose testimony the arbitrator found inconsistent and largely uncorroborated.
The arbitrator concluded NV Energy had cause for serious discipline but failed to prove termination was warranted; he ordered reinstatement with no backpay and a last-chance agreement, plus sensitivity training (at Parker’s expense).
NV Energy refused to reinstate and moved to vacate the award arguing (1) the award did not draw its essence from the CBA, (2) the arbitrator exceeded his authority, and (3) the award violates public policy; Local 1245 moved for summary judgment to enforce the award.
The district court denied NV Energy’s motion to vacate, granted Local 1245’s summary judgment motion, and ordered entry of judgment enforcing the arbitration award.

Issue	Plaintiff's Argument (NV Energy)	Defendant's Argument (Local 1245)	Held
Whether the arbitrator’s award draws its essence from the CBA	Award reflects arbitrator’s "industrial justice," finding both hostile environment and no just cause for termination — inconsistent with CBA	Arbitrator answered the submitted questions and his factual/constructional findings are a plausible contract interpretation	Court: Award draws its essence from the CBA; defer to arbitrator’s fact-finding and contract construction
Whether the arbitrator exceeded his authority under the CBA	Arbitrator disregarded CBA/policies and federal/state law by reinstating an employee who violated harassment/discrimination rules	Arbitrator stayed within his remedial authority and only required employer to meet its burden of proof before termination	Court: Arbitrator did not exceed authority; remedy within arbitrator’s latitude under the CBA
Whether the award violates public policy against racial harassment/discrimination	Reinstatement contravenes explicit public policy requiring employers to prevent/stop racial harassment	No conflict: arbitrator found employer failed to prove termination-level misconduct; remedy (no backpay, last-chance, training) does not violate public policy	Court: Public-policy vacatur not warranted; no explicit, dominant policy defeated by the award

United Steelworkers of Am. v. Enterprise Wheel & Car Corp., 363 U.S. 593 (1960) (arbitrator’s construction of a CBA must be upheld if it draws its essence from the agreement)
Misco, Inc. v. United Paperworkers Int’l Union, AFL-CIO, 484 U.S. 29 (1987) (courts must defer to arbitrator’s interpretation unless award is his own brand of industrial justice)
Sprewell v. Golden State Warriors, 266 F.3d 979 (9th Cir. 2001) (identifies grounds for vacating arbitration awards and emphasizes limited judicial review)
Sheet Metal Workers Int’l Ass’n v. Ariz. Mech. & Stainless, Inc., 863 F.2d 647 (9th Cir. 1988) (judicial scrutiny of arbitrator’s decision is extremely limited)
Sheet Metal Workers’ Int’l Ass’n Local Union No. 359 v. Madison Indus., Inc. of Ariz., 84 F.3d 1186 (9th Cir. 1996) (award must be a plausible contract interpretation to be enforceable)
United Food & Commercial Workers Int’l Union, Local 588 v. Foster Poultry Farms, 74 F.3d 169 (9th Cir. 1995) (public-policy vacatur requires explicit, dominant policy that the award specifically contravenes)
Westvaco Corp. v. Paperworkers, 171 F.3d 971 (4th Cir. 1999) (no public policy requiring termination of every harasser; employers must take reasonable care to prevent and correct harassment)