Labor & Employment Law

Order vacating arbitration award reversed

The 6th Circuit applied its recent decision in Michigan Family Resources, Inc. v. Service Employees International Union, 475 F3d 746 (2007) which held that courts were without authority to overturn an arbitrator's award which was arguably construing or applying the contract and acting within the scope of his authority.

Truck Drivers Local v. Allied Waste (6th Cir 01/04/2008)

The arbitrator set aside the employee's discharge and ordered reinstatement with back pay and benefits. The trial court granted the employer's motion to vacate. The 6th Circuit reversed.

The major issue was whether the arbitrator's award violated Section 9.4(G) of the agreement stating that "the degree of discipline ... imposed for just cause shall be in the sole discretion of management and shall not be subject to modification by an arbitrator."

The arbitrator, citing Section 8.1 which prohibited the employer from "discharg[ing] or otherwise disciplin[ing] an employee without just cause[.]," reasoned that the just cause-inquiry required evaluation of whether the employee violated a work rule and then to consider whether the discipline was reasonable under the circumstances.

The court found that Section 9.4(G) was not clear on its face and could reasonably be interpreted as the arbitrator had done. The court found no basis upon which to vacate the arbitrator's award because the arbitrator was arguably construing and applying an unclear contractual provision.

The court awarded back pay from the date of the arbitrator's award until the date of the employee's eventual reinstatement. The court stated this was an appropriate judicial remedy reasoning that if an arbitration award was to be final and binding, the employer was required to reinstate the employee and pay him.

Full post as published by Arbitration Blog on January 06, 2008 (boomark / email).