The opinion of the court was delivered by: Conti, District Judge
ORDER DENYING PETITIONER'S MOTION
TO VACATE ARBITRATION AWARD
On October 31, 2002, Petitioner SSA Terminals (SSAT) filed, pursuant to
9 U.S.C. § 10(a)(4), a motion to vacate the arbitration Decision and
Award of August 2, 2002 (Award), that directs Petitioner to reinstate
James Huey to his former position as a refrigeration mechanic and to pay
him full back pay and benefits. For the reasons set forth below, this
Court denies Petitioner' s motion, and directs Petitioner immediately to
comply with the Award.
James Huey has worked for Petitioner and its predecessor at the same
location for approximately 23 years, most recently as a refrigeration
mechanic. His employment is governed by a Collective Bargaining Agreement
(CBA). On September 1, 2000, Huey reported an on-the-job accident that
injured his lower back. Huey received treatment for his injury from two
board-certified physicians: Dr. Julie Nefkens, an internist, and Dr.
Jeffrey Meter, an orthopedic surgeon. Based on her opinion and that of
Dr. Meter, Dr. Nefkens completed several work restriction slips that Huey
submitted to Petitioner. These slips indicated that Huey should not
bend, lift, or climb at all. Following his doctors' orders, Huey did not
return to work.
Petitioner was suspicious of Huey's claimed disability, and
communicated this suspicion to its workers' compensation insurance
carrier, who then investigated Huey's claim. The insurance carrier
arranged to videotape Huey surreptitiously during the time that he was,
according to his doctors, unable to return to work. Petitioner contends
that the videotapes show Huey engaging in numerous physical activities
that involve bending, lifting, and climbing. According to Petitioner,
these activities include using a hedge trimmer, a leaf blower strapped to
his back, and a lawn mower, as well as jumping up and down to compact the
debris in a trash container, and lifting a garbage container over his
In December, 2000, the insurance carrier deposed Huey. At no time
before or during the deposition did Petitioner or the insurance carrier
provide Huey an opportunity to view the videotape, nor did they notify
Huey that the videotape existed. Petitioner contends that Huey perjured
himself at the deposition by falsely stating that he complied with all
the physical restrictions imposed by his doctors.
On January 8, 2001, Petitioner terminated Huey's employment. The letter
of termination explains that Petitioner terminated Huey essentially
because Huey allegedly "intentionally misrepresented [his] physical
limitations and subjective complaints to [his] doctors and to the
employer/compensation carrier for the purpose of obtaining Workers'
Compensation benefits." (Pet'r's Ex. J)
Huey filed a grievance challenging his termination, and the dispute
went to arbitration. Gerald R. McKay (Arbitrator) conducted the
arbitration, and held hearings on May 13, May 21, and May 22, 2002. On
August 2, 2002, the Arbitrator issued the Award which concluded that
Petitioner did not have just cause to terminate Huey and directed
Petitioner to reinstate Huey with full back cay and benefits.
Now pending before this Court is Petitioner's mat tan to vacate the
Arbitrator's Award on the ground that the Award exceeds the Arbitrator's
power under 9 U.S.C. § 10(a)(4). Huey, on the other hand, asks this
Court to deny Petitioner's motion, to confirm the Arbitrator's award, and
to order Petitioner to pay Huey's attorneys' fees in this proceeding.
In general, courts reviewing the decision of a labor arbitrator are
required to accord an arbitrator's decision a "nearly unparalleled degree
of deference," Stead Motors of Walnut Creek, v. Automotive Machinists
Lodge Number 1173. International Association of Machinists and Aerospace
Workers, 886 F.2d 1200, 1205 (9th Cir. 1989) (citations omitted). "When
reviewing the award of arbitrator chosen by the parties to a collective
bargaining agreement, we are bound - under all except the most limited
circumstances — to defer to the decision of another even if we
believe that the decision finds the facts and states the law
erroneously." Id., 886 F.2d at 1204.
The reason for this unusually high degree of deference is that the
arbitrator's decision is deemed to be part of the parties' agreement.
Unlike the commercial contract, which is designed to
be a comprehensive distillation of the parties'
bargain, the collective bargaining agreement is a
skeletal, interstitial document. The labor arbitrator
is the person the parties designate to fill in the
gaps; for the vast array of circumstances they have
not considered or reduced to writing, the arbitrator
will state the parties' bargain. He is "the parties'
is officially designated `reader' of the contract . . .
their joint alter ego for the purpose of striking
whatever supplementary bargain is necessary" to handle
matters omitted from the agreement . . .
Since the labor arbitrator is designed to function in
essence as the parties' surrogate, he cannot
"misinterpret" a collective bargaining agreement. As
Professor St. Antoine observes, "[i]n the absence of
fraud or an overreaching of authority on the part of
the arbitrator, he is speaking for the parties, and
his award is their contract." Thus, what courts do
when they review an arbitrator's award is more akin to
the review of a contract than of the decision of an
inferior tribunal: the award, just as a contract, is
the expression of the parties' will and must be
enforced as expressed unless illegal or otherwise
As to the bases for an arbitrator's award,
commentators and courts have long recognized that the
arbitrator is entitled, and is even expected, to range
afield of the actual text of the collective bargaining
agreement he interprets: "The labor arbitrator's
source of law is not confined to the expressed
provisions of the contract, as the industrial common
law - the practices of the industry and the shop - is
equally part of the collective bargaining agreement
although not expressed in it.
Stead Motors, 886 F.2d at 1206-07, citing United Steelworkers of Am. v.
Warrior & Gulf Navigation Company, 363 U.S. 574, 581-82 (1960). In
fact, courts are not competent to second-guess an arbitrator's judgment
because courts are unfamiliar with "the practices of the industry and the
shop." Stead Motors, 886 F.2d at 1207.
There are, of course, exceptions to the general rule that courts must
defer to the judgment of an arbitrator. However, these exceptions are
While we accord an arbitrator's decision a "nearly
unparalleled degree of deference," Stead Motors, 886
F.2d at 1205, we have identified narrow exceptions to
the general rule. Vacatur of an arbitration award
under section 301 of the LMRA [Labor Management
Relations Act] is warranted: (1) when the award does
not draw its essence from the collective bargaining
agreement and the arbitrator is dispensing his own
brand of industrial justice; (2) where the arbitrator
exceeds the boundaries of the issues submitted to
him; (3) when the award is contrary to public policy;
or (4) when the award is procured by fraud.
Southern California Gas Company v. Utility Workers Union of America,
265 F.3d 787, 792-93 (9th Cir. 2001). Two of these exceptions are
relevant in this case: the essence of the contract exception, and the
public policy exception. The Ninth ...