Supreme Court Rules on Labor, Commercial Arbitration Cases

Dispute Resolution Journal, February-April 2001 | Go to article overview

Supreme Court Rules on Labor, Commercial Arbitration Cases


Eastern Associated Coal v. United Mine Workers of America and Green Tree Financial v. Randolph, heard by the U.S. Supreme Court in the early days of its October 2000 term, were decided before year's end. In one, the arbitration award was upheld; in the other, it was the commercial contract's arbitration clause.

The Court's opinion on Eastern Associated Coal, delivered in November, upheld a labor arbitration award that reinstated a mobile equipment operator who had been terminated by his employer after twice testing positive for marijuana. The award suspended the worker without pay for three months, required him to bear the costs of arbitration, mandated additional substance abuse treatment and testing, and required him to provide a signed letter of resignation in the event he failed another drug test within the next five years.

Eastern Associated Coal had sought to vacate the award on the ground that it violated the clear public policy against the operation of safety-sensitive machinery by workers who use drugs inherent in the Omnibus Transportation Employee Testing Act of 1991 and the implementing regulations of the Department of Transportation.

The Court agreed in principle that the "authority to invoke the public policy exception is not limited solely to instances where the arbitration award itself violates positive law." However, the court also said that the public policy exception is narrow and must satisfy the principles in W.R. Grace & Co. v. Local Union 759, and United Paperworkers International Union, AFL-CIP v. Misco. After examining the Employee Testing Act, the Court found no "explicit," "welldefined" or "dominant" public policy to which the arbitrator's decision "runs contrary." In fact, the award, with its suspension and requirement for continued drug testing and treatment, was consistent with the act's remedial aims and with DOT rules regarding return to work.

In conclusion, the Court said: "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."

The Green Tree opinion, delivered on December 11, said that an arbitration clause that was silent with respect to fees did not render the agreement unenforceable. …

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