US Supreme Court Briefs

No. 99-1038


IN THE
SUPREME COURT OF THE UNITED STATES

EASTERN ASSOCIATED COAL CORPORATION,
Petitioner,

V.

UNITED MINE WORKERS OF AMERICA, DISTRICT 17;
LOCAL 1503, UNITED MINE WORKERS OF AMERICA,
Respondents.



On Writ of Certiorari to the
United States Court of Appeals
for the Fourth Circuit



REPLY BRIEF FOR PETITIONER




RONALD E. MEISBURG
HEENAN, ALTHEN & ROLES
1110 Vermont Avenue, N.W.
Suite 400
Washington, D.C. 20005
(202) 887-0800

ANNA M. DAILEY
DONNA C. KELLY
HEENAN, ALIHEN & ROLES
1380 One Valley Square
P.O. Box 2549
Charleston, WV 25329
(304) 342-8960

JOHN G. ROBERTS, JR.*
DAVID G. LEITCH
H. CHRISTOPHER BARTOLOMUCCI
HOGAN & HARTSON L.L.P.
555 Thirteenth Street, N.W.
Washington, D.C. 20004
(202) 637-5810



* Counsel of Record Counsel for Petitioner


TABLE OF CONTENTS
Page
TABLE OF AUTHORITIES 11
INTRODUCTION AND SUMMARY 2
ARGUMENT 5
I. THE FACT THAT THE DOT REGULATIONS
LEAVE TO PRIVATE CONTRACT THE DECI-
SION WHETHER AN EMPLOYEE N A SAFE-
TY-SENSITIVE POSITION WHO TESTS POS-
ITIVE FOR ILLEGAL DRUG USE SHALL BE
REiNSTATED SIMPLY POSESDOES NOT
ANSWERTHE QUESTION PRESENTED 5

II. THE POSITION OF THE UNION AN]) THE
SOLICITOR GENERAL THAT THE REINSTATEMENT AWARD MUST BE ENFORCED
SIMPLY BECAUSE IT IS NOT ILLEGAL IS
CONTRARY TO THE ESTABLISHED UNDERSTANDING OF THE PUBLIC POLICY DOC
TRINE 11

III. APPLYING THE PUBLIC POLICY EXCEPTION TO ARBITRAL AWARDS IS FULLY
CONSISTENT WITH FEDERAL LABOR LAW 13
CONCLUSION 20










(i)



Cases:
TABLE OF AUTHORITIES iii
Page
TABLE OF AUTHORITIESContinued

Alexander v. Gardner-Denver Co., 415 U.S. 36
(1974)
Allis-Chalmers Corp. v. Lueck, 471 U.S.
202 (1985)
Bowen v. United States Postal Serv., 459 U.S.
212 (1983)
E.L DuPont de Nemours & Co. v. Grasselli Em-
ployees Indep. Ass '11, 790 F.2d 611(7th Cir.),
cert. denied, 479 U.S. 853 (1986)
Exxon Corp. v. Esso Workers' Union, Inc., 118
F.3d 841 (1st Cir. 1997) Gateway
Coal Co. v. United Mine Workers, 414 U.S. 368
(1974) Gulf Coast Indus. Workers
Union v. Exxon Co., US.A., 991 F.2d 244 (5th
Cir.), cert. denied, 510 U.S. 965 (1993)
Hurdv. Hodge, 334 U.S. 24 (1948) Iowa
Elec. Light & Power Co. v. Local Union 204,
IBEW, 834 F.2d 1424 (8th Cir. 1987)
The Kensington, 183 U.S. 263 (1902)
Livadas v. Bradshaw, 512 U.S.
1
0
7
(
1
9
9
4
)

Local 174 v. Lucas Flour Co.,
369 U.S. 95 (1962)....
Local No. P-1236 V. Jones Dairy Farm, 680 F.2d
1142 (7th Cir. 1982)
Marshall v. Baltimore & Ohio R.R, 57 U.S.
314 (1853)
Town of Newton V. Rumery, 480 U.S. 386 (1987)
Trist v. Child, 88 U.S. 441 (1874)
United Mine Workers of Am. Health & Retirement
Funds v. Robinson, 455 U.S. 562
(1982) United Paperworkers Int'l
Union v. Misco, Inc., 484U.S.29(1987)
United Steelworkers v. Warrior & Gulf Navigation
Co., 363 U.S. 574 (1960) Vaca v.
Sipes, 386 U.S. 171 (1967)
16

17, 18
14
W.R. Grace & Co. v. Local Union 759, Int'l Union
of Rubberworkers, 461 U.S. 757 (1983)
Wright v. Universal Maritime Serv. Corp., 525
U.S. 70(1998)
Page


passlin

16
Statutory Provisions:
42U.S.C.1983 11
Labor Management Relations Act of 1947,
29
U.S.C. 173(d) 15, 16-17

Regulations and Executive Materials:
18-19

6

15


18
11,14
Other:
18
12
18
14

12
49 C.F.R. 3 82.605
49 C.F.R. 3 82.605(b)
49 C.F.R. 382.605(c)(2Xi)
59 Fed. Reg. 7484 etseq. (Feb. 15, 1994)



National Ass'n of Alcoholism & Drug Abuse
Counselors, Ethical Standards of
Alcoholism & Drug Abuse Counselors,
Principle 7(c) (1995) Restatement
(Second) of Contracts 179, comment
b(1981)
S
10
10
6,7,8





10

5
12
11
3

12

passim

15
14
(ii)





IN THE


~,upreint Ql~ourt ot Ujt ~Iuitcb ~,tate~

No. 99-1038


EASTERN ASSOCIATED COAL CORPORATION,
Petitioner,
V.


UNITED MINE WORKERS OF AMERICA, DISTRICT 17; LOCAL 1503, UNITED MINE WORKERS OF AMERICA,
Respondents.


On Writ of Certiorari to the
United States Court of Appeals
for the Fourth Circuit


REPLY BRIEF FOR PETITIONER


We began our opening brief by explaining that there is a well-established rule that courts will not enforce a contract contrary to public
policy, and that this rule applies to collective bargaining agreements and arbitration awards entered pursuant to them. See Pet. Br. 11-27.
Neither the Union nor the Solicitor General takes issue with either showing. We went on to demonstrate that there is a well-defined and
dominant public policy against illegal drug use by those in certain safety-sensitive positions, grounded in part in the Testing Act and DOT
regulations. See id. at 29-38. Once again, neither the Union nor the Solicitor General challenges that showing.


2 3


Instead, both the Union and the Solicitor General put all
their eggs in one basket: the contention that the public
policy exception is limited in this case, so that courts
asked to enforce arbitration awards reinstating confirmed
drug users to safety-sensitive positions may only check
for compliance with the minimum requirements of the
DOT regulations. The upshot of this position is, of
course, that there is no public policy exception at all in
such casesarbitration awards that violate the DOT
regulations are unenforceable on that ground, not because
of the public policy exception. Neither the Union nor
the Solicitor General, however, has carried the burden of
justifying such a departure from the time-tested rule.

INTRODUCTION AND SUMMARY

The Union and the Solicitor General labor mightily in
their submissions to establish what turns out to be merely
the predicate for the question presentednamely, that
the Testing Act and DOT regulations "leav[e] to private
ordering" the decision whether a commercial driver who
tests positive for illegal drugs should be reinstated to his
safety-sensitive position. SG Br. 15; UMWA Br. 14.
Since the earliest days of the common law, however,
whenever private ordering has taken the form of a
contractual agreement, and the courts have been asked to
enforce that agreement, the courts have had the
authority to decline to do so on the ground that the
agreement contravenes public policy. That is so because
"the public's interests in confining the scope of private
agreements to which it is not a party will go
unrepresented unless the judiciary takes account of those
interests when it considers whether to enforce such
agreements." United Paperworkers Int'l Union v. Misco,
Inc., 484 U.S. 29, 42 (1987).
What neither the Union nor the
Solicitor General even attempts to explain is
why that principle "of universal application," Trist v.
Child, 88 U.S. 441, 448 (1874), is somehow inapplicable
to this particular realm of private ordering. Certainly
nothing in the Testing Act or DOT regulations remotely
suggests that in leaving the question of reinstatement to
be decided by contract, Congress or the Executive meant
to repeal the established common law rulesincluding the
public policy exceptionthat govern all other contractual
arrangements. The very fact that the regulations accord
such a prominent role to private contract makes it
particularly important that the "safety valve" of the
public policy exception remain available, so that when
courts are called upon to enforce reinstatement awards
they do not lend their authority to awards posing a
serious threat to public safety.

The argument of the Union and the Solicitor General
reduces to nothing more than the minority position on
the question reserved in Misco, 484 U.S. at 45 n. 1 2hat
courts applying the public policy exception to arbitration
awards should be restricted to asking whether the award
itself is illegal or requires unlawful conduct. According to
the Union and the Solicitor General, the Act and
regulations adopt an "anything goes" approach with
respect to reinstating drug users to safety-sensitive
positions, once the minimum requirements in the
regulations have been met. Under their approach, nothing
the parties may agree to (or which an arbitrator may
award) can possibly be contrary to the acknowledged
public policy against illegal drug use by those occupying
safety-sensitive jobs, and the courts must enforce any
agreement (or arbitration award) without regard to its
impact on third parties, public safety, or the testing
program mandated by the Act. As we explained in our
opening brief, however, the public policy exception has
never been limited





4 5

to illegal agreements or arbitration awards that are them-
selves illegal. See Pet. Br. 14-19 (citing cases,
Restatement, and commentators). Such a restriction
would do away with the exception altogether.

Nor, contrary to the Union's contention, is there any
basis for concluding that the public policy exception
should not apply with its ordinary scope to collective
bargaining agreements or arbitration awards entered
pursuant to them. The normal rule of deference to
arbitrators does not apply when the issue is the rights
and interests of third parties who have not agreed to
arbitration, and the question to be decided is one of
public policy rather than the interpretation of a collec-
tive bargaining agreement. In any event, courts applying
the public policy exception do not second-guess the
arbitrator's factual findings, but only ask whether in light
of the facts as found enforcement of the award would
violate public policy. That question ''is ultimately one
for resolution by the courts.~~ W R. Grace & Co. v. Local
Union 759, Int'l Union of Rubberworkers, 461 U.S. 757, 766
(1983).

For hundreds of years. courts asked to enforce private
agreements have understood themselves to be authorized
indeed, duty-boundto pause and consider whether en-
forcement would violate public policy by, for example,
threatening the well-being of third parties not privy to
the agreement. What would be "radical" (SG Br. 30) is to
accept the Union's and the Solicitor General's invitation
to turn a blind eye to the direct threat to public safety
posed by enforcement of this award, and to conclude
that such awards are immune from the public policy
exception applicable as a matter of course to all other
contracts.


ARGUMENT

I. THE FACT THAT THE DOT REGULATIONS
LEAVE TO PRIVATE CONTRACT THE DECIS-
ION WHETHER AN EMPLOYEE IN A SAFETY-
SENSITIVE POSITION WHO TESTS POSITIVE
FOR ILLEGAL DRUG USE SHALL BE REIN-
STATED SIMPLY POSESDOES NOT AN-
SWERTHE QUESTION PRESENTED.

The Union and the Government contend that the
courts are powerless to consider whether an arbitration
award ordering a reinstatement not prohibited by the
regulations may violate public policy. This is so, we are
told, because the regulations permit reinstatement in
certain circumstancesspecified in 49 C.F.R.
382.605and leave the question of reinstatement "with
the employer ** *, subject to any constraints on
management discretion * * * that the employer has
voluntarily assumed." SG Br. 13. See UMWA Br. 22-23.
But while the regulations applicable here certainly
establish the minimum process that must be followed prior
to any reinstatement, there has been no showing that
this minimum has "entirely occupied the field" to the
exclusion of the public policy doctrine. Restatement
(Second) of Contracts 179, comment b (1981). The
minimum requirements expressly do not occupy the field
to the exclusion of private agreements; there is no
reason to suppose they do so to the exclusion of an
established common law doctrine that goes hand in hand
with all such agreements.'


I The Union seeks to advance its argument by
suggesting that the public policy on which we rely is
drawn only from the Testing Act and the DOT
regulations. See UMWA Br. 9. ln fact, as we explained,
the well-defined and dominant public policy against
illegal drug use by those in safety-sensitive positions is
grounded in a solid phalanx of positive law,' "including
but not limited to the Testing Act and the regulations
issued under it. Pet. Br. 31





6 7


On the contrary, the very most that the Union and
the Government can offer is that the Testing Act and
DOT regulations generally leave the question of
reinstatement to "private ordering"except where the
employee fails to go through the evaluation and
rehabilitation process and reinstatement is therefore
barred. We agree. When it promulgated the pertinent
regulations, the Federal Highway Administration made
clear that compliance with that process "will not
guarantee a right of reemployment," and that the
employer could impose additional consequences "based
on the employer's authority independent of these rules," so
long as such "additional policies [are] clearly identified as
based on the employer's independent authority." 59 Fed. Reg.
7484, 75 02-03 (Feb. 15, 1994) (emphases added). There
is no reason to conclude, however, that such independent
authority is not subject to generally applicable legal
principles including, where contractual arrangements
are at issue, the doctrine that courts will not enforce
contracts contrary to public policy.2
There are, to be sure, references in the regulatory
record indicating that an employer's independent
authority to impose additional consequences for failed
drug tests will sometimes be constrained by collective
bargaining. See, eg, 59 Fed. Reg. at 7332. But nowhere is
there the slightest hint that the results of such bargaining
are somehow sacrosanct, elevated to a position above
that occupied by all other contracts, even in the age of
Lochner, see Pet. Br. 13 n.4, such that the public policy
doctrine does not apply. Indeed, this Court has already
determined that "[a]s with any contract,
*** a court may not enforce a collective-bargaining agree-
ment that is contrary to public policy." WR. Grace, 461
U.S. at 766. Nothing in the administrative record of the
DOT regulations purports to displace this settled rule.3

Not only does the administrative record fail to provide
any support for the view of the Union and the Solicitor
General that the regulations somehow displace the
centuries-old public policy doctrine, but such a
conclusion would defy




(quoting Exxon Corp. v. Esso Workers' Union, lnc., 118 F.3d
841, 849 (1st Cir. 1997)). See Pet. Br. 30-38
(reviewing statutes, regulations, and precedents). The
Testing Act and the regulations are "designed to promote
the public policy against performance of safety-sensitive
tasks by persons who use drugs," Esso Workers' Union, 118
F.3d at 848, but do not purport to and do not exhaust the
bounds of that policy.
2 The Solicitor General misses the point in viewing our
argument as being "that if employers are permitted to
impose sanctions for drug use above and beyond those
mandated by the regulations, then federal courts must be
free to do so as well." SG Br. 19 (citing Pet. Br. 46-47).
What we actually said was quite different:
"While employers and employees *** remain free to agree
by contract on both the process for addressing violations
of the drug policy and on sanctions for those violations,
any such agree-
mentlike all other contractual arrangementsremains
subject to the public policy doctrine, applied by the
courts. Nothing in the Act or regulations
suggests otherwise." Pet. Br. 47. The
Solicitor General has no response to
that contention.

~ The Academy of Arbitrators argues
that the public policy exception should not
preclude judicial enforcement of any arbitration award
ordering action that an employer could take on its own.
See Academy Br. 4. This standard ignores the fact that
the public policy exception is a doctrine of contract law
and is implicated only when the courts are
called upon to enforce a contract.
See Pet. Br. 12-13. It is not a free-
standing cause of action applicable to unilateral
conduct. The employer's unilateral conduct in this regard
is, in any event, constrained by the same considerations
that inform the public policy exception, expressed in
potential tort liability for the conduct of a reinstated
driver. See Pet. App. 9a- I Oa; Brief Amicus Curiae of
ExxonMobil Corporation 7.





8 9

common sense. As we have explained, the public policy
doctrine has always been applied with an eye toward
public safety. See Pet. Br. 30 n. 15. It would be
particularly odd to conclude that the doctrine has been
displacedsub silentic, no lessin a context where public
safety is so directly implicated and was the very reason
for the Testing Act in the first place. See SG Br. 2-3. And
it would be even odder to conclude that the doctrine was
displaced solely by a decision to leave the issue to private
contracta decision that typically would trigger, not
preclude, application of this common law contract
doctrine. If the reinstatement question is to be left to
"private ordering," it is especially important that the
public policy doctrine remain in place as a safety valve to
protect those interests not otherwise accounted for yet
directly affected by the reinstatement decision. See Misco,
484 U.S. at42.

That the DOT regulations do not occupy the field to
the exclusion of the public policy exception is true both
as a general matter and in the particular case of repeat
offenders. While the Union and the Solicitor General
suggest that the failure to adopt a proposed regulation
which would have imposed a period of suspension for
second-time offenders somehow displaces the public
policy doctrine on the reinstatement question, see
UMWA Br. 18-19; SG Br. 5, 10, 20-21, there is no basis
for attributing such an effect to DOT's failure to act.
Indeed, the decision not to adopt the suspen-
sion proposal is wholly unexplained in the
administrative record. See 59 Fed. Reg. at 7493
(simply noting that "[t]he FHWA has not
included any CDL suspensions or other disqualifications
[in] the final rule"). The failure to adopt a one-size-fits-
all rule applicable in every case of a recidivist offender,
along with the decision to leave the issue of rein-
statement to private contract, hardly evinces an unstated
intent to bar application of the public policy doctrine, a
doc
trine applicable as a matter of course to all contracts on a
case-by-case basis as a safety valve to guard against egre-
gious outcomes from the private ordering process. See
Pet. Br. 39 n.25, 47~4

The Solicitor General's representation that DOT
decided to entrust decisions regarding repeat offenders to
"the sound judgment of arbitrators," SG Br. 10, is fanciful
at best; the administrative record contains no mention of
arbitrators. Furthermore, as explained below, labor
arbitrators lack both the expertise and the authority to
apply public policy. See infraat 15-16.

Nor can public safety reasonably be left in the hands of
the substance abuse professional ("SAP") selected to
counsel a


'~ The Solicitor General suggests that because DOT
regulations disqualify for 60 days a driver twice convicted
of a serious traffic violation within a three-year period,
courts have no choice but to enforce an award reinstating
a driver who tests positive for illegal drugs twice within
14 months. See SG Br. 21-22 n. 10. This apples-and-
oranges comparison ignores a number of considerations,
including that a recidivist drug offender has already been
through a rehabilitation program, which proved
unsuccessful in preventing renewed use, and that
reinstatement in such circumstances seriously undermines
the deterrent effect of the testing program. See Pet. Br.
40-44. In addition, it is important to recognize that the
position of the Solicitor General and the Union is that
courts must enforce awards reinstating drivers who test
positive a second, fifth, or even twentieth time, and that
in no case may a court decline to do so on public policy
grounds. If the Court agrees with us that this extreme
position is untenable, the only remaining question is the
proper application of the public policy exception on the
particular facts of this case. The Union and the Solicitor
General have not rebutted our showing in that regard
(Pet. Br. 38-44), having chosen instead to rest on the
contention that courts may not undertake the public
policy inquiry at all.




10

driver who tests positive. First, nothing in the
regulations mandates that a SAP consider public safety in
creating a rehabilitation program. See 49 C.F.R.
382.605(b). Second, the SAP's professional obligations
run to the driver, not the public; what may be best for
the driver may not be best from the point of view of
public safety. See National Ass'n of Alcoholism & Drug
Abuse Counselors, Ethical Standards of Alcoholism &
Drug Abuse Counselors, Principle 7(c) (1995) ("The
NAADAC member shall hold the welfare of the client
paramount when making any decisions or
reconunendations concerning referral, treatment
procedures or termination of treatment."). Finally, the
SAP must simply confirm that the driver "has properly
followed any [prescribed] rehabilitation program"not
that the program was (or was likely to be) successful,
that the driver is unlikely to use drugs again, or even that
it is safe for him to return to a position in which such use
might imperil others. 49 C.F.R. 382.605(c)(2)(i). Such a
minimal certification is little comfort from the per-
spective of public safety in a case such as this, when one
thing known for certain is that "properly follow[ing]" a
prior rehabilitation program did not work. See Brief
Amicus Curiae of the Institute for a Drug-Free
Workplace 18 ("those with a history of substance abuse
pose a much greater risk of relapse and its attendant risks
than those without such a history") (emphasis in
original).

In sum, in arguing at length that the issue of
reinstatement is largely unaddressed by the Testing Act
and its regulations but is instead left to private ordering,
the Union and the Solicitor General do no more than set
up the question presented in this caseunder what
circumstances may courts refuse to enforce private
contractual arrangements, including, as here, collective
bargaining agreements and the results of arbitration under
those agreementson the ground that they are "contrary
to public policy."
11

II. THE POSITION OF THE UNION AND THE
SOLICITOR GENERAL THAT THE
REINSTATEMENT AWARD MUST BE
ENFORCED SIMPLY
BECAUSE IT IS NOT ILLEGAL IS CONTRARY
TO THE ESTABLISHED UNDERSTANDING OF
THE PUBLIC POLICY DOCTRINE.

Neither the Union nor the Solicitor General, then,
show any intent in the Act or regulations to displace the
public policy exception generally applicable whenever
courts are asked to enforce private agreements; the most
they show is that the regulations do not prohibit the
reinstatement order at issue here. In other words, the
Union and the Solicitor General have simply adopted the
narrower of the two possible answers to the question left
open in Misco: whether "a court may refuse to enforce an
award on public policy grounds only when the award
itself violates a statute, regulation, or other
manifestation of positive law, or compels conduct by the
employer that would violate such a law." 484 U.S. at 45
n. 12. The Union explicitly takes this position (UMWA
Br. 27), while the Solicitor General does so implicitly.

As shown in our opening brief, this Court's cases have
not limited the public policy doctrine to violations of
positive law. See Pet. Br. 14-16. Indeed, in both W.R.
Grace, 461 U.S. at 766, and Misco, 484 U.S. at 42, this
Court prominently cited with approval Hurd v. Hodge,
334 U.S. 24 (1948). in which the Court refused to
enforce a restrictive covenant that violated no
constitutional or statutory provision but clearly did
violate public policy. See also Town of Newton v. Rumery,
480 U.S. 386. 392-396 (1987) (considering whether
release-dismissal agreements violate public policy even
though 42 U.S.C. 1983 is silent on the issue).

And even well before such modern cases, the Court had
squarely rejected the notion that a contractual provision
cannot be held contrary to public policy where "there is
no





12 13


statute expressly prohibiting such contracts." The Kensing-
ton, 183 U.S. 263, 270 (1902). Thus, the longstanding
rule has been that a court "will not lend its aid to enforce
a contract to do an act that is illegal; or which is
inconsistent with *** public policy." Marshall v. Baltimore &
Ohio R.R., 57 U.S. 314, 334 (1853) (emphasis added).5
The Restatement and leading commentators agree. See
Pet. Br.
16-17. Tellingly, neither the Union nor the Solicitor
General even attempts to respond to our showing on this
point.

Their position would leave no room for cases like Local
No. P-1236 v. Jones Dairy Farm, 680 F.2d 1142 (7th Cir.
1982). There, a meat processor adopted a rule
prohibiting its employees from reporting unsanitary
conditions directly to Department of Agriculture
inspectors rather than to company management. An
arbitrator upheld the rule, but the Seventh Circuit
accepted the union's argument that the rule violated
"clearly defined" public policy, id. at 1145, citing the
overarching purposes of the Meat Inspection Act, even
though no specific provision of the Act made the rule
illegal.6


~ United Mine Workers of America Health & Retirement Funds
v. Robinson, 455 U.S. 562 (1982), cited by
the Union (UMWA Br. 30), is not to the
contrary. That case involved a claim
that a provision of a collective bargaining agreement
violated the Labor Management Relations Act
("LMRA") itself, not public policy, and, in any event,
the Court recognized that such provisions are entitled to *
* * respect" only so long as they "do not violate federal
law or policy." 455 U.S. at 575 (emphasis added).
6 The Academy attempts to distinguish Jones Dairy Farm
on the ground that the issue there was not "the
arbitrator's decision on the just cause' of an employer's
discipline" but rather the validity of "a contract rule"
(Academy Br. 11), but that is not a principled basis for
distinction. Indeed, as the Academy itself points out,
when an arbitrator resolves a labor-management dispute
pursuant to a written agreement calling for arbitration,
"it is just as if the
If the Misco question were answered as the
Union would have it, there would no
longer be a public policy doctrine.
Instead, the role of courts would be
reduced to asking whether an arbitration
award violates an express statutory or
regulatory provision. A court would be
obligated to lend its imprimatur to an arbitrator's
decision and enforce the award no matter how
egregious a threat to public safety the
award may pose.

That is not and should not be the
law. Because the courts below thought
otherwise, this Court should at the
least remand the case to afford the lower
courts the opportunity to apply the public
policy doctrine as correctly
understood. See Pet. Br. 28.

III. APPLYING THE PUBLIC POLICY EXCEP-
TION TO ARBITRAL AWARDS IS FULLY
CONSISTENT WITH FEDERAL LABOR
LAW.

The Union insists that for a court
to do more than ask whether an
arbitration award is illegal would be
inconsistent with federal labor law. See UMWA Br.
26-31. In this, the Union is quite wrong.

As an initial matter, the Union misconceives the
source of the public policy doctrine. The Union suggests
the doctrine comes from Section 301 of the LMRA, and
thus calls it "the LMRA 301 public policy exception."
UMWA Br. 27. In fact, however, the source of the public
policy doctrine is the common law of contracts. As the
Misco Court explained:
"A court's refusal to enforce an arbitrator's award under a
collective-bargaining agreement because it is contrary to
public policy is a specific application of the more general


employer and the union had stipulated in so many words
that this was the prescribed remedy under the
circumstances." Id. at 9. The outcome of the arbitration
is the "contract rule."





14 15

doctrine, rooted in the common law, that a court may refuse to
enforce contracts that violate law or public policy." 484 U.S. at
42 (emphasis added). And in W.R. Grace, the Court said
that "[als with any contract, *** a court may not enforce a
collective-bargaining agreement that is contrary to public
policy." 461 U.S. at 766 (emphasis added). Both of the
quoted statements, moreover, were followed by a citation
to Hurd v. Hodge, supra, which involved neither labor law
nor arbitration. Thus, the public policy doctrine is
properly understood as a common law rule applicable to
all contracts, including collective bargaining agreements.7

Contrary to the Union's contention, judicial review of
labor arbitration awards for violations of public policy is
not inconsistent with federal labor law. We agree that the
labor laws require a court to refrain from second-guessing
the

~' The Union distorts statements in Bowen v. United
States Postal Service, 459 U.S. 212 (1983), and Local 174 v.
Lucas Flour Co., 369 U.S. 95 (1962), in arguing that such
common law doctrines do not apply to suits under
Section 301. In Lucas Flour, the Court said that
"incompatible doctrines of local law must give way to
principles of federal labor law," id. at 102 (emphasis
added), not, as the Union says, "incompatible doctrines
of [common] law." UMWA Br. 28 n.16 (brackets by the
Union). Lucas Flour thus merely stands for the
unremarkable proposition that federal labor law preempts
inconsistent state law. And Bowen did not say that the
Court has "not appl[ied] principles of ordinary contract
law" in Section 301 cases generally (UMWA Br. 28), but
rather that "Vaca [v. Sipes, 386 U.S. 171 (1967)] did not
apply principles of ordinary contract law" to the question
of "apportionment of damages caused by the employer's
breach of the collective-bargaining agreement and the
union's breach of its duty of fair representation." Bowen,
459 U.S. at 224. The fact that the Vaca Court elected not
to apply contract law to that very specific labor law issue
hardly establishes that the common law of contracts is to
be routinely ignored in Section 301 cases.
decision of a labor arbitrator in the
ordinary case, see Pet. Br.
24, but the grounds for such judicial deference are lacking
in
a case like this-for three reasons.

First, it is one thing for a court to defer to the decision
of an arbitrator where all the parties whose interests are
at stake have consented to the arbitration process. But it
is quite another for a court to defer to an arbitral decision
that affects third parties who never consented to be
subject to an arbitrator' s unreviewable decree. See id. at
24-25. The LMRA identifies arbitration as the preferred
means of resolving disputes between contracting parties who
consent to the process. See 29 U.S.C. 173(d) ("Final
adjustment by a method agreed upon by the parties is
declared to be the desirable method for settlement of
grievance disputes") (emphasis added). Those who have
not consented to arbitrationhere, the traveling
publiccannot be bound by an arbitrator' s determination.
See United Steelworkers v. Warrior & Gulf Navigation Co.,
363 U.S. 574, 582 (1960) ("arbitration is a matter of
contract and a party cannot be required to submit to
arbitration any dispute which he has not agreed so to
submit").8


~ Gateway Coal Co. v. United Mine Workers, 414 U.S. 368
(1974), heavily relied on by the Union (UMWA Br. 34-
35) and the Academy (Academy Br. 10), is readily
distinguishable. The Union quotes Gateway Coal for the
proposition that labor policies favoring arbitration "'are
as applicable to labor disputes touching .
safety ... as to other varieties of disagreement.'" UMWA
Br. 34 (ellipses by the Union). Filling in the ellipses, what
the Court actually referred to was "labor disputes
touching the safety of the employees," 414 U.S. at 379
(emphasis added), not the safety of the public at large.
The issue in Gateway Coal was thus "the workers' interest
in their own safety," id., which presumably can be
left to the agreement of the parties
or an arbitrator selected by them. The
question here is public safetythe impact on those not





16 17

Second, one of the reasons courts defer to labor
arbitrators is the latter's presumed expertise in "the law
of the shop." Alexander v. Gardner-Denver Co., 415 U.S.
36, 57 (1974). But arbitrators have no comparable
expertise in "the law of the land." Id. See also Wright v.
Universal Maritime Serv. Corp., 525 U.S. 70, 78 (1998)
(presumption of arbitrability "does not extend beyond
the reach of the principal rationale that justifies it, which
is that arbitrators are in a better position than courts to
interpret the terms of a CBA") (emphasis in original).
Arbitrators are not experts in determining whether a
properly interpreted collective bargaining agreement is
consistent with public policy, which is an issue
"ultimately * * * for resolution by the courts." WR. Grace,
461 U.S. at 766. See Pet. Br. 25.

Third, even if arbitrators were competent to factor
public policy into their decisions, labor law does not
authorize them to do so. The role of a labor arbitrator is
to interpret and apply the collective bargaining
agreement between the parties to the arbitration, and he
may not base his decision on factors outside the four
corners of that agreement. See id. at 25-26. Public safety
is notably absent from the Solicitor General's list of
factors an arbitrator should consider in a case such as
this, see SG Br. 26, and the arbitrator's award in this
case evinces no consideration of public safety in ordering
reinstatement. See Pet. App. 28a ("If the arbitrator was
misled by the grievant, the arbitrator is confident that
the grievant will make another misstep with drug use and
be caught."). The LMRA itself recognizes that
arbitration is confined to the resolution of disputes "over
the application or interpretation of an existing collective-
bargaining agreement." 29


parties to the collective bargaining agreementwho have
in no way agreed to abide by an arbitrator's decision
affecting their safety.
U.S.C. 173(d) (emphasis added). The public policy
question begins, not ends, with such an application or
interpretation.

Although the current Solicitor General is willing to leave
the question in the hands of an arbitrator,
"notwithstanding the fact that the consequences *** may
be felt beyond the employer's place of business," SG Br.
26, the Office has previously explainedwhen it was
urging this Court to vacate an arbitrator's award ordering
reinstatement of a postal worker fired for failing to
deliver the mailthat "arbitrators are not competent to
make the final judgment concerning the degree of risk
that the public may legally be forced to assume" and that
"external authorities such as courts must retain the final
say in order to ensure that overriding public interests are
properly vindicated." Reply Brief for the United States,
United States Postal Serv. v. National Ass 'n of Letter
Carriers, No. 87-59, at 14, 15.

This Court's decision in Allis-Chalmers Corp. v. Lueck, 471
U.S. 202 (1985), strongly supports our analysis. In con-
sidering the extent to which collective bargaining
agreements preempt state law, the Court noted that

Section 301 on its face says nothing about the
substance of what private parties may agree to in a
labor contract. Nor is there any suggestion that
Congress, in adopting 301, wished to give the
substantive provisions of private agreements the
force of federal law, ousting any inconsistent state
regulation. Such a rule of law would delegate to unions
and unionized employers the power to exempt
themselves from whatever state labor standards they
disfavored. Clearly, 301 does not grant the parties
to a collective-bargaining agreement the ability to
contract for what is illegal under state law. [Id. at
211-212 (footnote omitted).]





18 19

The Court therefore held that labor agreements may
preempt only those "state-law rights and obligations that
do not exist independently ofprivate agreements, and that as a
result can be waived or altered by agreement of private parties."
Id. at 213 (emphasis added). See also id. at 213 n.8
(distinguishing "rights which could be waived by contract
between the parties, on the one hand, from an
individual's substantive right derived from an independent
body of law that could not be avoided by a contractual
agreement, on the other"); Livadas v. Bradshaw, 512 U.S.
107, 123 (1994) (Section 301 does not preempt
"nonnegotiable rights conferred on individual employees
as a matter of state law") (citing Lueck).

The common law public policy doctrine is such "an
independent body of law" that cannot be "waived or
altered" by private agreement. Obviously, parties cannot
contract around a doctrine the very point of which is to
limit that for which parties can contract. And if labor
and management cannot "contract for what is illegal
under state law," they cannot contract for that which
violates clearly defined public policy derived from federal
law and regulations.

The Solicitor General depicts our position as being that
the District Court in this case should have exercised "de
novo review" over the arbitrator's decision, and "should
have either made its own credibility determination * * "', or
conducted a new evidentiary hearing." SQ Br. 29, 27.
Not so. Courts have been applying the public policy
exception to arbitration awards for many years, and they
have recognized that the issue is resolved "by taking the
facts as found by the arbitrator, but reviewing his
conclusions de novo." Iowa Elec. Light & Power
Co. v. Local Union 204, IBEW, 834 F.2d 1424, 1427 (8th
Cir. 1987). See Gulf Coast Indus. Workers Union v.
Exxon Co., US.A., 991 F.2d 244, 249 (5th Cir.) (same),
cert. denied, 510 U.S. 965 (1993); E.I
DuPont de Nemours & Co. v. Grasselli
Employees indep. Ass 'n, 790
F.2d 611, 616 (7th Cir.) (courts applying public policy
exception "correctly refused to defer to the arbitrator's
conceptions of public policy, [but] they continued to
respect his findings of fact"), cert. denied, 479 U.S. 853
(1986). Here, there was no need for the District Court to
second-guess any of the arbitrator's findings, because the
arbitrator made no finding to the effect that Smith is
likely to be successfully rehabilitated or is unlikely to use
drugs again in the future. See Pet. Br. 42-43.

Both the Union (UMWA Br. 28-3 4) and the Solicitor
General (SQ Br. 24-3 0) issue dire warnings about the
consequence to labor arbitration of applying the public
policy exception, even though the exception has been a
comfortable corollary to the development of contract
law over the centuries and has not given rise to an era of
industrial strife in those circuits that have adopted our
position. When the shoe was on the other foot, the
Office of the Solicitor General recognized that organized
labor "cries 'wolf in suggesting that empowering federal
courts to make these judgments will lead to the
destruction of the private arbitration system," in part
because "courts have long been judging under the auth-
ority of other lawssuch as the antitrust laws and the
labor lawswhether particular terms of collective
bargaining agreements (and arbitration awards
implementing them) create legally unacceptable risks of
future harm to well-defined and dominant public
policies." Reply Brief for the United States, United States
Postal Serv. v. National Ass 'ii of Letter Carriers, No. 87-
59, at 15, 16.

* * *



For centuries courts have refused to enforce not only
illegal contracts, but also those that do violence to public
policy. Courts have done so both to protect third parties
who may be harmed by private compacts in which they
had no say and to





20

protect themselves from becoming accomplices in the public policy violation. The proper test is not, of course,
the court's subjective sensibilities, but whether there is a clearly established policy firmly rooted in law, rule, and precedent. Here, there is such
a policy, and it is violated by an agreement that requires a court to return a repeat drug user, as to whom deterrence and rehabilitation have
already failed, to a job in which a further lapse on his part may claim the lives of innocent motorists.

CONCLUSION

For the foregoing reasons, and those in petitioner's opening brief, the judgment below should be reversed.

Respectfully submitted,


RONALD E. MEISBURG
HEENAN, ALTHEN & ROLES
1110 Vermont
Avenue, N.W.
Suite 400
Washington, D.C.
20005
(202) 887-0800

ANNA M. DAILEY
DONNA C. KELLY
HEENAN, ALTUEN & ROLES
1380 One Valley
Square
P.O. Box 2549
Charleston, WV
25329
(304) 342-8960
JoHN G. ROBERTS, JR.*
DAVID G. LEITCH
H. CHRISTOPHER
BARTOLOMUCCI
HOGAN & HARTSON
L.L.P.
555 Thirteenth Street,
N.W.
Washington, D.C.
20004
(202) 637-5810



* Counsel of Record Counsel for Petitioner

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