EASTERN ASSOCIATED COAL CORP. v. UNITED MINE WORKERS OF AMERICA, DISTRICT 17, ET AL.
No. 99-1038
Supreme Court of the United States
Argued October 2, 2000—Decided November 28, 2000
531 U.S. 57
John G. Roberts, Jr., argued the cause for petitioner. With him on the briefs were David G. Leitch, H. Christopher Bartolomucci, Ronald E. Meisburg, Anna M. Dailey, and Donna C. Kelly.
John R. Mooney argued the cause for respondents. With him on the brief were Jonathan P. Hiatt, James B. Coppess, Judith Rivlin, Charles F. Donnelly, and Laurence Gold.
Malcolm L. Stewart argued the cause for the United States as amicus curiae urging affirmance. With him on the brief were Solicitor General Waxman, Acting Assistant Attorney General Ogden, Deputy Solicitor General Wallace, William Kanter, Mark W. Pennak, Nancy E. McFadden, Paul M. Geier, and Peter J. Plocki.*
JUSTICE BREYER delivered the opinion of the Court.
A labor arbitrator ordered an employer to reinstate an employee truck driver who had twice tested positive for marijuana. The question before us is whether considerations of public policy require courts to refuse to enforce that arbitration award. We conclude that they do not. The courts may enforce the award. And the employer must reinstate, rather than discharge, the employee.
Petitioner, Eastern Associated Coal Corp., and respondent, United Mine Workers of America, are parties to a collective-bargaining agreement with arbitration provisions. The agreement specifies that, in arbitration, in order to discharge an employee, Eastern must prove it has “just cause.” Otherwise the arbitrator will order the employee reinstated. The arbitrator‘s decision is final. App. 28-31.
James Smith worked for Eastern as a member of a road crew, a job that required him to drive heavy trucklike vehicles on public highways. As a truck driver, Smith was subject to Department of Transportation (DOT) regulations requiring random drug testing of workers engaged in “safety-sensitive” tasks.
Between April 1996 and January 1997, Smith passed four random drug tests. But in July 1997 he again tested positive for marijuana. Eastern again sought to discharge Smith. The union again went to arbitration, and the arbitrator again concluded that Smith‘s use of marijuana did not amount to “just cause” for discharge, in light of two mitigating circumstances. First, Smith had been a good employee for 17 years. App. to Pet. for Cert. 26a-27a. And, second, Smith had made a credible and “very personal appeal under oath ... concerning a personal/family problem which caused this one time lapse in drug usage.” Id., at 28a.
The arbitrator ordered Smith‘s reinstatement provided that Smith (1) accept a new suspension without pay, this time
Eastern brought suit in federal court seeking to have the arbitrator‘s award vacated, arguing that the award contravened a public policy against the operation of dangerous machinery by workers who test positive for drugs. 66 F. Supp. 2d 796 (SDWV 1998). The District Court, while recognizing a strong regulation-based public policy against drug use by workers who perform safety-sensitive functions, held that Smith‘s conditional reinstatement did not violate that policy. Id., at 804-805. And it ordered the award‘s enforcement. Id., at 805.
The Court of Appeals for the Fourth Circuit affirmed on the reasoning of the District Court. 188 F. 3d 501, 1999 WL 635632 (1999) (unpublished). We granted certiorari in light of disagreement among the Circuits. Compare id., at **1 (holding that public policy does not prohibit “reinstatement of employees who have used illegal drugs in the past“), with, e. g., Exxon Corp. v. Esso Workers’ Union, Inc., 118 F. 3d 841, 852 (CA1 1997) (holding that public policy prohibits enforcement of a similar arbitration award). We now affirm the Fourth Circuit‘s determination.
II
Eastern claims that considerations of public policy make the arbitration award unenforceable. In considering this claim, we must assume that the collective-bargaining agreement itself calls for Smith‘s reinstatement. That is because both employer and union have granted to the arbitrator the authority to interpret the meaning of their contract‘s language, including such words as “just cause.” See Steelwork-ers v. Enterprise Wheel & Car Corp., 363 U. S. 593, 599 (1960). They have “bargained for” the “arbitrator‘s construction” of their agreement. Ibid. And courts will set aside the arbitrator‘s interpretation of what their agreement means only in rare instances. Id., at 596. Of course, an arbitrator‘s award “must draw its essence from the contract and cannot simply reflect the arbitrator‘s own notions of industrial justice.” Paperworkers v. Misco, Inc., 484 U. S. 29, 38 (1987). “But as long as [an honest] arbitrator is even arguably construing or applying the contract and acting within the scope of his authority,” the fact that “a court is convinced he committed serious error does not suffice to overturn his decision.” Ibid.; see also Enterprise Wheel, supra, at 596 (the “proper” judicial approach to a labor arbitration award is to “refus[e] ... to review the merits“). Eastern does not claim here that the arbitrator acted outside the scope of his contractually delegated authority. Hence we must treat the arbitrator‘s award as if it represented an agreement between Eastern and the union as to the proper meaning of the contract‘s words “just cause.” See St. Antoine, Judicial Review of Labor Arbitration Awards: A Second Look at Enterprise Wheel and Its Progeny, 75 Mich. L. Rev. 1137, 1155 (1977). For present purposes, the award is not distinguishable from the contractual agreement.
We must then decide whether a contractual reinstatement requirement would fall within the legal exception that makes unenforceable “a collective-bargaining agreement that is contrary to public policy.” W. R. Grace & Co. v. Rubber Workers, 461 U. S. 757, 766 (1983). The Court has made clear that any such public policy must be “explicit,” “well defined,” and “dominant.” Ibid. It must be “ascertained ‘by reference to the laws and legal precedents and not from general considerations of supposed public interests.‘” Ibid. (quoting Muschany v. United States, 324 U. S. 49, 66 (1945)); accord, Misco, supra, at 43. And, of course, the question to be answered is not whether Smith‘s drug use itself violates public
III
Eastern initially argues that the District Court erred by asking, not whether the award is “contrary to” public policy “as ascertained by reference” to positive law, but whether the award “violates” positive law, a standard Eastern says is too narrow. We believe, however, that the District Court correctly articulated the standard set out in W. R. Grace and Misco, see 66 F. Supp. 2d, at 803 (quoting Misco, supra, at 43), and applied that standard to reach the right result.
We agree, in principle, that courts’ authority to invoke the public policy exception is not limited solely to instances where the arbitration award itself violates positive law. Nevertheless, the public policy exception is narrow and must satisfy the principles set forth in W. R. Grace and Misco. Moreover, in a case like the one before us, where two political branches have created a detailed regulatory regime in a specific field, courts should approach with particular caution pleas to divine further public policy in that area.
Eastern asserts that a public policy against reinstatement of workers who use drugs can be discerned from an examination of that regulatory regime, which consists of the Omnibus Transportation Employee Testing Act of 1991 and DOT‘s implementing regulations. The Testing Act embodies a congressional finding that “the greatest efforts must be expended to eliminate the ... use of illegal drugs, whether on or off duty, by those individuals who are involved in [certain safety-sensitive positions, including] the operation of ... trucks.”
In Eastern‘s view, these provisions embody a strong public policy against drug use by transportation workers in safety-sensitive positions and in favor of random drug testing in order to detect that use. Eastern argues that reinstatement of a driver who has twice failed random drug tests would undermine that policy—to the point where a judge must set aside an employer-union agreement requiring reinstatement.
Eastern‘s argument, however, loses much of its force when one considers further provisions of the Act that make clear that the Act‘s remedial aims are complex. The Act says that “rehabilitation is a critical component of any testing program,”
Moreover, when promulgating these regulations, DOT decided not to require employers either to provide rehabilitation or to “hold a job open for a driver” who has tested positive, on the basis that such decisions “should be left to management/driver negotiation.” 59 Fed. Reg. 7502 (1994). That determination reflects basic background labor law principles, which caution against interference with labor-management agreements about appropriate employee discipline. See, e. g., California Brewers Assn. v. Bryant, 444 U. S. 598, 608 (1980) (noting that it is “this Nation‘s long-standing labor policy” to give “employers and employees the freedom through collective bargaining to establish conditions of employment“).
We believe that these expressions of positive law embody several relevant policies. As Eastern points out, these policies include Testing Act policies against drug use by employees in safety-sensitive transportation positions and in favor of drug testing. They also include a Testing Act policy favoring rehabilitation of employees who use drugs. And the relevant statutory and regulatory provisions must be read in light of background labor law policy that favors determination of disciplinary questions through arbitration when chosen as a result of labor-management negotiation.
The award before us is not contrary to these several policies, taken together. The award does not condone Smith‘s conduct or ignore the risk to public safety that drug use by truck drivers may pose. Rather, the award punishes Smith by suspending him for three months, thereby depriving him of nearly $9,000 in lost wages, Record Doc. 29, App. A, p. 2;
The award violates no specific provision of any law or regulation. It is consistent with DOT rules requiring completion of substance-abuse treatment before returning to work, see
The fact that Smith is a recidivist—that he has failed drug tests twice—is not sufficient to tip the balance in Eastern‘s favor. The award punishes Smith more severely for his second lapse. And that more severe punishment, which included a 90-day suspension, would have satisfied even a “recidivist” rule that DOT once proposed but did not adopt—a rule that would have punished two failed drug tests, not with discharge, but with a driving suspension of 60 days. 57 Fed. Reg. 59585 (1992). Eastern argues that DOT‘s withdrawal of its proposed rule leaves open the possibility that discharge is the appropriate penalty for repeat offenders. That argument fails, however, because DOT based its withdrawal, not upon a determination that a more severe penalty was needed, but upon a determination to leave in place, as the “only driving prohibition period for a controlled substances violation,” the “completion of rehabilitation requirements
Regarding drug use by persons in safety-sensitive positions, then, Congress has enacted a detailed statute. And Congress has delegated to the Secretary of Transportation authority to issue further detailed regulations on that subject. Upon careful consideration, including public notice and comment, the Secretary has done so. Neither Congress nor the Secretary has seen fit to mandate the discharge of a worker who twice tests positive for drugs. We hesitate to infer a public policy in this area that goes beyond the careful and detailed scheme Congress and the Secretary have created.
We recognize that reasonable people can differ as to whether reinstatement or discharge is the more appropriate remedy here. But both employer and union have agreed to entrust this remedial decision to an arbitrator. We cannot find in the Act, the regulations, or any other law or legal precedent an “explicit,” “well defined,” “dominant” public policy to which the arbitrator‘s decision “runs contrary.” Misco, 484 U. S., at 43; W. R. Grace, 461 U. S., at 766. We conclude that the lower courts correctly rejected Eastern‘s public policy claim. The judgment of the Court of Appeals is
Affirmed.
JUSTICE SCALIA, with whom JUSTICE THOMAS joins, concurring in the judgment.
I concur in the Court‘s judgment, because I agree that no public policy prevents the reinstatement of James Smith to his position as a truck driver, so long as he complies with the arbitrator‘s decision, and with those requirements set out in the Department of Transportation‘s regulations. I do not endorse, however, the Court‘s statement that “[w]e agree, in principle, that courts’ authority to invoke the public policy exception is not limited solely to instances where the arbitra-
After its dictum opening the door to flaccid public policy arguments of the sort presented by petitioner here, the Court immediately posts a giant “Do Not Enter” sign. “[T]he public policy exception,” it says, “is narrow and must satisfy the principles set forth in W. R. Grace,” ante, at 63, which require that the applicable public policy be “explicit,” “well defined,” “dominant,” and “ascertained ‘by reference to the laws and legal precedents and not from general considerations of supposed public interests,‘” W. R. Grace & Co. v. Rubber Workers, 461 U. S. 757, 766 (1983) (quoting Muschany v. United States, 324 U. S. 49, 66 (1945)). It is hard to imagine how an arbitration award could violate a public policy, identified in this fashion, without actually conflicting with positive law. If such an award could ever exist, it would surely be so rare that the benefit of preserving the courts’ ability to deal with it is far outweighed by the confusion and uncertainty, and hence the obstructive litigation, that the Court‘s Delphic “agree[ment] in principle” will engender.
The problem with judicial intuition of a public policy that goes beyond the actual prohibitions of the law is that there is no way of knowing whether the apparent gaps in the law are intentional or inadvertent. The final form of a statute or regulation, especially in the regulated fields where the public policy doctrine is likely to rear its head, is often the
In sum, it seems to me that the game set in play by the Court‘s dictum endorsing “in principle” the power of federal courts to enunciate public policy is not worth the candle. Agreeing with the reasoning of the Court except insofar as this principle is concerned, I concur only in the judgment.
Notes
Theodore J. St. Antoine, John Kagel, and David E. Feller filed a brief for the National Academy of Arbitrators as amicus curiae urging affirmance.