Reference no: EM131706749

Case Sceanrio: EASTERN ASSOCIATED COAL CORPORATION V. UNITED MINE WORKERS OF AMERICA, DISTRICT 17 531 U.S. 57 (2000)

Justice Breyer delivered the opinion of the Court. ... Eastern Associated Coal Corp., and respondent, United Mine Workers of America, are parties to a collectivebargaining 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. 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. In March 1996, Smith tested positive for marijuana. Eastern sought to discharge Smith. The union went to arbitration, and the arbitrator concluded that Smith's positive drug test did not amount to "just cause" for discharge. Instead the arbitrator ordered Smith's reinstatement, provided that Smith

(1) accept a suspension of 30 days without pay,

(2) participate in a substance-abuse program, and

(3) undergo drug tests at the discretion of Eastern (or an approved substance-abuse professional) for the next five years. 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. 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." The arbitrator ordered Smith's reinstatement provided that Smith

(1) accept a new suspension without pay, this time for slightly more than three months;

(2) reimburse Eastern and the union for the costs of both arbitration proceedings;

(3) continue to participate in a substance-abuse program;

(4) continue to undergo random drug testing; and

(5) provide Eastern with a signed, undated letter of resignation, to take effect if Smith again tested positive within the next five years.

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. 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. And it ordered the award's enforcement. The Court of Appeals for the Fourth Circuit affirmed on the reasoning of the District Court. [Eastern appealed to the U.S. Supreme Court.] Eastern claims that considerations of public policy make the arbitration award unenforceable.... 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." 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." The Court has made clear that any such public policy must be "explicit," "well defined,"and "dominant."It must be"ascertained ‘by reference to the laws and legal precedents and not from general considerations of supposed public interests.'" And, of course, the question to be answered is not whether Smith's drug use itself violates public policy, but whether the agreement to reinstate him does so. To put the question more specifically, does a contractual agreement to reinstate Smith with specified conditions run contrary to an explicit, well-defined, and dominant public policy, as ascertained by reference to positive law and not from general considerations of supposed public interests? 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 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 requires the Secretary of Transportation to promulgate regulations requiring "testing of operators of commercial motor vehicles for the use of a controlled substance."It mandates suspension of those operators who have driven a commercial motor vehicle while under the influence of drugs. And DOT's implementing regulations set forth sanctions applicable to those who test positive for illegal drugs. 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".

Neither the Act nor the regulations forbid an employer to reinstate in a safety-sensitive position an employee who fails a random drug test once or twice. The congressional and regulatory directives require only that the above-stated prerequisites to reinstatement be met. 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." That determination reflects basic background labor law principles, which caution against interference with labor-management agreements about appropriate employee discipline.... 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; it requires him to pay the arbitration costs of both sides; it insists upon further substance-abuse treatment and testing; and it makes clear (by requiring Smith to provide a signed letter of resignation) that one more failed test means discharge. 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, for it does not preclude Eastern from assigning Smith to a non-safety-sensitive position until Smith completes the prescribed treatment program. It is consistent with the Testing Act's driving license suspension requirements, for those requirements apply only to drivers who, unlike Smith, actually operated vehicles under the influence of drugs. The award is also consistent with the Act's rehabilitative concerns, for it requires substance-abuse treatment and testing before Smith can return to work. 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." We conclude that the lower courts correctly rejected Eastern's public policy claim. The judgment of the Court of Appeals is affirmed.

Case Questions

1. Why did the arbitrator order the reinstatement of Smith? What penalties did Smith suffer as a result of testing positive for drug use?

2. What does the employer use to define the public policy it claims requires that Smith be discharged? Does the Court read those materials as defining the same public policy as claimed by the employer?

3. Does the Court enforce the arbitrator's award here? Why?