Mixing Standards from Different Arbitration Schemes

I put the following question to John Allgood, and I got such a thoughtful response, I thought I would share it:

John,
Got a question for you: In Aldred v. Avis Rent-A-Car, Slip Copy, 2007 WL 2110720(C.A.11 (Fla.) (2007), used both FAA and labor arbitration standards in reviewing an award under a collective bargaining agreement. Also in Bryant Motors, Inc. v. Blue Bird Body Co., Slip Copy, 2007 WL 1832016, , M.D.Ga., June 25, 2007), modified by Bryant Motors, Inc. v. Blue Bird Body Co., Slip Copy, 2007 WL 2422133, (M.D.Ga. 2007), the court mixes standards and cases from labor arbitration with the FAA in its analysis on a motion to vacate in a commercial arbitration case. Are these judges just mixed up or is the line between the labor and commercial arbitration law more fluid than one might think?

Curious,
Doug

From John:

Doug - Let me try to give you a couple of views in answer to your questions. First, I think the federal courts (and the clerks and non-labor attorney advocates) in general are not always up on traditional labor laws under the Labor Management Relations Act. They don't appear to understand that the use of arbitration under the LMRA developed independently of the FAA standards that have occurred in employment law cases ("Statutory Rights") in the last 10-15 years. In general then I don't think they understand Collective Bargaining Agreements or the grievance procedures that are part of that area. Section 301 of the LMRA allowed the federal courts to fashion a federal policy for the enforcement of arbitration provisions in the CBA context. The federal courts in these arbitration cases are then applying a national labor policy authorized under Section 301, not the F.A.A. It is traced to the Lincoln Mills decision, 353 U.S. 448 and the Steelworkers Trilogy cited below. The standard for review of the Section 301 arbitration awards, however, is similar to the FAA. There is great deference to the decision of the arbitrator. But the standard is the Award is entitled to deference only " so long as it draws its essence from the collective bargaining agreement." Enterprise Wheel, 363 U.S. at 597 See Elkouri & Elkouri, How Arbitration Works, 6th ed. , chapter 2.

The federal circuits do not have one uniform standard on what is a basis to vacate a CBA arbitration award. But all of the circuits impose a high standard just like under the FAA. I'm going to send you a copy of a district court order vacating an award under a CBA that we recently received in the 7th Circuit.

While the Bryant case below is a commercial case, I think some of the confusion stems from the expansion of arbitration into the Statutory Rights area where there may be some similar employment matters as under CBA rights. These statutory rights employment matters are governed by the FAA. I think the courts are not always aware of the two separate derivations (1) federal labor (union) law directives in CBA arbitration cases; and (2) statutory rights. It has never been decided that the FAA applies in the collective bargaining area. These cases, however, deal with so many of the same type grievances as employment cases that I think the two get mixed up. I believe I've also seen courts cite the labor cases like the Steelworkers Trilogy , 363 U.S. 564, 363 U.S. 574 and 363 U.S. 593 in various commercial decisions dealing with a request to vacate. In the Bryant case below on page 3 you see the court citing labor cases but in the context of the FAA. I don't think this is unusual. Maybe it's because someone does a search on vacation of arbitration awards and comes up with these cases. Or maybe they are simply taking the logic fashioned by the circuits under Section 301 labor cases and trying to apply a similar [uniform] standard for review in the commercial [FAA] arena. I can't say. I believe they could find better FAA cases that could be part of the analysis without suggesting confusion with the CBA cases. It seems to go only in one direction, however. I think when you have a CBA case presented typically by labor counsel, then you don't get citations as much to the FAA but rather to the case law under 301. The Avis case, however, does raise this issue and Jackson Lewis is a traditional Labor firm. Here on page 2 of the decision is a lengthy reference to the FAA. I wouldn't have made this argument because the FAA isn't needed based on the federal labor law policies and case decisions that are in play.

To me it's hard to separate CBA arbitration cases from the overlay of the National Labor Relations Act and the NLRB standards applied to ULP. This is a framework that never is engaged in the commercial or statutory rights areas. At the same time I've thought that one of the reasons the S. Ct. supported expansion of arbitration of statutory rights was because they had seen the operation under CBA's of employment grievances and arbitration awards and they felt it was a good means of resolution. Employment cases obviously cannot be governed by entirely different standards of review. In both I do think there is a sensitivity for procedural standards not found to the same degree as in commercial matters.

Doug - this is probably more than you wanted but it was a slow morning and you asked. Hope you have a great new year.

John


Thanks, John.