Grievance Arbitration and the Narrow Standard of Review

Most collective bargaining agreements end their grievance procedure with arbitration, and most of them say the award is final and binding. Federal law takes that language seriously. A party that loses in arbitration and files in district court is not appealing; it is asking a court to find that the arbitrator had no authority to decide what was decided, and that is a much harder question than being wrong.

Where the enforcement power comes from

Section 301 of the Labor Management Relations Act gives district courts jurisdiction over suits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce. The Supreme Court read that grant as authorizing federal courts to fashion a body of substantive law from national labor policy, and the first thing that law produced was a rule that promises to arbitrate are specifically enforceable.

Three decisions decided in a single group set the framework and have not been displaced. They hold that a court asked to compel arbitration may not weigh the merits, that doubts about coverage are resolved in favor of arbitration, and that a court asked to enforce an award may not substitute its own reading of the contract.

Arbitrability, and who answers the question

Substantive arbitrability asks whether the parties agreed to arbitrate this kind of dispute. That is for the court, unless the agreement clearly and unmistakably assigns it to the arbitrator. The standard applied is demanding in one direction only: arbitration is ordered unless it may be said with positive assurance that the clause is not susceptible of an interpretation covering the dispute.

Procedural arbitrability is different and belongs to the arbitrator. Whether a grievance was filed within the contractual days, whether a step was skipped, whether an appeal to the next stage was timely, and whether a defect was waived are all questions the arbitrator resolves, because they are bound up with the merits and with the parties' own practice.

The essence test, and what it forgives

An award must draw its essence from the collective bargaining agreement. So long as the arbitrator was construing and applying the contract, the award is enforced even where the court is convinced the interpretation is wrong, the fact-finding careless, or the reasoning thin. A court may not reject an award because its own reading differs.

The test bites where the arbitrator stops interpreting. An award resting on the arbitrator's own notion of industrial justice, or granting relief the contract expressly forecloses, exceeds the authority the parties conferred. Fraud, corruption, evident partiality and a refusal to hear material evidence supply the other narrow grounds, drawn from the general arbitration statute even though labor arbitration is enforced under Section 301.

The exception courts mention and rarely apply

A court may refuse to enforce an award that would require a violation of positive law or that offends public policy, but the policy must be explicit, well defined and dominant, and it must be ascertained from laws and legal precedents rather than from general considerations of the public interest. The Supreme Court has applied the doctrine sparingly and has enforced awards reinstating employees discharged for conduct the employer described as intolerable.

Employers pressing the exception usually lose because they argue the policy at too high a level of generality. The exception asks whether the award itself violates a specific legal command, not whether reinstatement seems unwise.

The agency's own deference, and its limits

Conduct can breach both the contract and the statute. Where it does, the Board has long deferred to the arbitral process, staying its hand while a grievance proceeds and giving weight to an award that dealt with the statutory issue. The precise standard for accepting an award, and the burden of showing it deserves acceptance, has been rewritten several times and should be checked against current authority rather than assumed.

Deferral is not automatic. It has never been applied to conduct going to the existence of the bargaining relationship itself, which is why disputes over whether a buyer must recognize an incumbent are resolved as successorship questions under the statute rather than under a contract the buyer never signed.

Discipline cases arrive here constantly, and a discharge growing out of a work stoppage will be tested against both the contract and the separate rules distinguishing an economic strike from one caused by unfair labor practices. Where the discipline followed questioning, the arbitrator will hear argument about the denial of a representative at the investigatory interview, which the Board may not remedy but which an arbitrator can weigh. Readers comparing this to internal review systems elsewhere will find the exhaustion requirement familiar from the rule that available remedies must be used before suit, though the consequences of default are harsher here.