The court’s decision to vacate the arbitral award in this case contradicts decades of precedent delineating a narrow public policy exception and threatens as a practical matter to destabilize many, if not most, arbitral awards. Indeed, its impact may well reach beyond labor arbitration to commercial arbitration under the Federal Arbitration Act.
Pillard argued the court should not relieve Amtrak of its obligation to comply with its collective bargaining agreement.
Randolph, writing for the majority, said the exception should be applied in Bryant’s case because the court would essentially be enforcing an illegal contractual obligation. The inspector general should not have been restricted by any rules created in collective bargaining agreements to conduct investigations.
“An arbitration award may not be enforced if it transgresses well defined and dominant laws and legal precedents,” Randolph said in the opinion.
In her dissent, Pillard noted cases in which the Supreme Court declined to invoke the public policy exception in previous cases, including a case in which an operator of dangerous machinery was found with marijuana in a company parking lot and another in which male employees were given seniority over women in a contract agreement. She said in these cases the high court was bound to not second-guess the ways arbitrators handled the public policy issue at hand.
“As the Supreme Court envisioned it, the public policy exception would only be triggered by a public policy whose ‘explicit, well defined and dominant’ character could be ascertained by reference to laws and legal precedents,” she said.
Pillard said defining the rule in this case as ground for this exception “exceeds the scope” of the court’s review.
“Today’s decision invites litigation in every case in which a disappointed party to an arbitration case can base its own objection on some claim of error that places the awards at odds with law or public policy,” Pillard wrote. “Once arbitration becomes the state rather than the end of the dispute resolution process, it no longer serves the role Congress envisioned.”
The attorney for the Amtrak officer said he plans to request a review from the entire D.C. Circuit and plans to appeal to the U.S. Supreme Court in this case, if necessary.
“Allowing the panel’s decision to stand would undermine nearly a century of jurisprudence under the Railway Labor Act,” Thomas Cushane of Cushane Law Firm, who argued for the Amtrak officer, said.
Thomas Reinert Jr. of Morgan, Lewis & Bockius, who represented Amtrak in the case, did not return messages seeking comment.
