Fifth Circuit Affirms Arbitration Decision on Collective Bargaining Agreement

In January, the United States Fifth Circuit Court of Appeals upheld an arbitrator’s decision in a case that arose pursuant to a collective bargaining agreement. In Albemarle Corporation v. United Steel Workers AOWU Local 103, No. 11-31185 (5th Cir. Jan. 3, 2013), two Albemarle Corporation (“Albemarle“) employees were terminated for alleged safety violations. Their union, United Steel Workers (“USW”), represented the men in arbitration under the parties’ collective bargaining agreement (“CBA”). After an arbitrator ruled that the two men should be reinstated following a 14-month unpaid suspension, Albemarle sought judicial review of the arbitrator’s decision. In the case, Albemarle claimed the arbitrator exceeded his authority and his decision violated public policy. A district court granted Albemarle’s motion for summary judgment and vacated the arbitrator’s decision. USW then appealed the case to the Fifth Circuit.

The Circuit Court stated judicial review of an arbitral decision that arises from a CBA is narrowly limited. According to the Fifth Circuit, so long as an arbitrator has arguably construed the parties’ agreement and acted within the scope of his authority his decision may not be overturned even if a court believes he committed serious error. Because there was no language in the CBA that required an employee be terminated as a result of a safety violation, the Appeals Court held the arbitrator’s reading of the contract was within the bounds of his authority.

Next, Albemarle maintained that the arbitrator’s decision to reinstate the employees violated public policy. The Circuit Court stated that although a collective bargaining agreement may be unenforceable on such grounds, the “public policy must be explicit, well defined, and dominant.” The Fifth Circuit continued,

In the present case, the Grievants made a serious error in the manner they reported the spill for which they are being strictly disciplined. However, the arbitrator at the same time found that the Grievants had no prior record of safety violations; that a gasket failure, and apparently not the Grievants, was responsible for causing the leak; that the Grievants reported the incident within five minutes to a security guard who quickly reached a supervisor; and that the spill was not cause for issuing emergency notifications. In light of the factual record, Albemarle does not articulate how the CBA, if read by the arbitrator to permit reinstating the Grievants after sanctioning them fourteen months lost wages, violates public policy. We find the public policy exception does not apply.

Because the arbitrator’s decision was within the bounds of his authority under the parties’ CBA and did not violate public policy, the Fifth Circuit reversed the district court’s decision and upheld the arbitral award.