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1 IN THE SUPREME COURT OF THE UNITED STATES

2 - - - - - - - - - - - - - - - - X

3 EASTERN ASSOCIATED COAL :

4 CORPORATION, :

5 Petitioner :

6 v. : No. 99-1038

7 UNITED MINE WORKERS OF AMERICA, :

8 DISTRICT 17, ET AL. :

9 - - - - - - - - - - - - - - - - X

10 Washington, D.C.

11 Monday, October 2, 2000

12 The above-entitled matter came on for oral

13 argument before the Supreme Court of the United States at

14 11:05 a.m.

15 APPEARANCES:

16 JOHN G. ROBERTS, JR., ESQ., Washington, D.C.; on behalf of

17 the Petitioner.

18 JOHN R. MOONEY, ESQ., Washington, D.C.; on behalf of the

19 Respondents.

20 MALCOLM L. STEWART, ESQ., Assistant to the Solicitor

21 General, Department of Justice, Washington, D.C.; on

22 behalf of the United States, as amicus curiae,

23 supporting the Respondents.

24

25

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1 C O N T E N T S

2 ORAL ARGUMENT OF PAGE

3 JOHN G. ROBERTS, JR., ESQ.

4 On behalf of the Petitioner 3

5 ORAL ARGUMENT OF

6 JOHN R. MOONEY, ESQ.

7 On behalf of the Respondents 26

8 ORAL ARGUMENT OF

9 MALCOLM L. STEWART, ESQ.

10 On behalf of the United States, as amicus curiae,

11 supporting the Respondents 41

12 REBUTTAL ARGUMENT OF

13 JOHN G. ROBERTS, JR., ESQ.

14 On behalf of the Petitioner 50

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2

1 P R O C E E D I N G S

2 (11:05 a.m.)

3 CHIEF JUSTICE REHNQUIST: We'll hear argument

4 next in Number 99-1038, The Eastern Associated Coal

5 Corporation v. United Mine Workers of America.

6 Mr. Roberts.

7 ORAL ARGUMENT OF JOHN G. ROBERTS, JR.

8 ON BEHALF OF THE PETITIONER

9 MR. ROBERTS: Thank you, Mr. Chief Justice, and

10 may it please the Court:

11 Twice the driver in this case tested positive

12 for illegal drugs, and twice the company that employed him

13 to drive its 25-ton vehicles in West Virginia tried to

14 fire him. Each time an arbitrator ordered the driver

15 reinstated. The second time the company went to court,

16 arguing that the reinstatement award should not be

17 enforced because it was contrary to public policy to put

18 this driver back behind the wheel.

19 The district court and the court of appeals,

20 however, rejected that argument and concluded that because

21 reinstatement was not illegal, the public policy exception

22 to the enforceability of contracts, quote, does not apply,

23 unquote.

24 QUESTION: Mr. Roberts, did the company have any

25 provision in the collective bargaining agreement about

3

1 what it was going to do for positive drug testing?

2 MR. ROBERTS: Yes. The agreement said that in

3 the case of a positive drug test the driver was subject to

4 sanctions up to and including termination, and the

5 arbitrator concluded that in this case they hadn't

6 established just cause.

7 That, of course, is the predicate for the

8 application of the public policy exception in every case,

9 the fact that the contract provides a result that is

10 different from the one the parties are arguing for under

11 public policy.

12 QUESTION: How do you read Department of

13 Transportation regulations on this? They're quite

14 extensive, and as I read them it doesn't expressly cover

15 what happens for a second violation. There was a proposal

16 to do something that I guess they didn't adopt.

17 MR. ROBERTS: Yes, there was a proposal, and it

18 was just not adopted.

19 QUESTION: Yeah.

20 MR. ROBERTS: We don't know if it was because it

21 was regarded as too strict or not strict enough.

22 QUESTION: So is it within the provisions of the

23 regulations actually adopted that an employee could be

24 restored to driving a truck under these circumstances?

25 MR. ROBERTS: Certainly after one positive test.

4

1 QUESTION: After a --

2 MR. ROBERTS: The question of a --

3 QUESTION: It just doesn't say.

4 MR. ROBERTS: No. The question of a recidivist

5 is not addressed by the regulations at all.

6 QUESTION: Mm-hmm.

7 MR. ROBERTS: What the regulations provide --

8 and we agree with the Solicitor General's reading of the

9 regulations. We don't take issue with it -- is that in a

10 case of a positive drug test a couple of things have to

11 happen. The driver, before he can go back to work, has to

12 pass the minimum requirements, which is just evaluation by

13 a substance abuse professional and pass a return-to-work

14 test, and then whether or not the driver gets his job back

15 is left to private ordering.

16 Now, if that private ordering takes the form of

17 a contract, a collective bargaining agreement, that

18 contract should be subject to the public policy exception

19 just like every other contract is. There is not --

20 QUESTION: Why, Mr. Roberts, because you could

21 have said expressly, you didn't have to as a contracting

22 party rely on what a court might or might not declare to

23 be the public policy. Could you have not said, a driver

24 gets tested and shows up positive twice, he's out. You

25 could have said that. You could have negotiated for that.

5

1 MR. ROBERTS: Well, we could have tried.

2 Whether or not it would have been the result of the

3 collective bargaining practice is another question.

4 QUESTION: But you didn't, you didn't do that,

5 or we don't know.

6 MR. ROBERTS: The arbitrator determined that we

7 didn't, I think is the best way to put it. Now -- but

8 under this court's decision in Kaiser Steel, though, even

9 if we had signed a contract that was illegal, we'd still

10 have standing to object to that.

11 QUESTION: Yes, but I'm just trying to make the

12 narrow point that an employer could bargain for a rule

13 that says you test positive for drugs twice, and you're

14 out, could bargain for such a rule.

15 MR. ROBERTS: Yes. There's no question about

16 that. Again, all that does is pose the question under the

17 public policy exception.

18 QUESTION: Well then it would make that academic

19 or moot if you had it in the contract.

20 MR. ROBERTS: Well, if the union agreed to it,

21 if it were phrased in such a way that it were not subject

22 to an arbitrator's misinterpretation, and it's also the

23 case that it may not be the best result.

24 QUESTION: There are such contracts, as I

25 understand it --

6

1 MR. ROBERTS: Yes.

2 QUESTION: -- are there not?

3 MR. ROBERTS: Yes.

4 QUESTION: They'd make it explicit where the

5 first time, second time, you're out, period.

6 MR. ROBERTS: Yes, there are some contracts. In

7 other cases unions have resisted them, and in other cases

8 perhaps the employer recognizes that an absolute rule may

9 not be the best result.

10 QUESTION: So in other words, what you're

11 seeking, then, would be a rule that says the public policy

12 kicks in if the employer wants to discharge this person,

13 but suppose the employer would say, we're going to give

14 him a second chance, even a third chance, there would be

15 no public policy to come into that picture.

16 MR. ROBERTS: That's right, and for a very

17 important reason, is because the doctrine that we're

18 talking about is a doctrine of contract law. It only

19 applies when the question of the enforcement of a contract

20 is at issue. That is an important limitation on the

21 public policy role for the courts, and --

22 QUESTION: But in other words you are saying the

23 bottom line rule that you're urging is that you ought to

24 be permitted, if you so choose, to discharge this man, but

25 if you do not so choose, then there's no -- there's

7

1 nothing that --

2 MR. ROBERTS: Oh, but there is something very

3 much that constrains the company's choice in that

4 situation, and that's tort law. The same public policy

5 that informs the exercise of the public policy exception

6 when the court is asked to enforce the contract restrains

7 what the company can do on its own unilaterally.

8 QUESTION: Well, I want to get into that, but

9 just before we leave this last question, if the company

10 had a contract that said three strikes and you're out,

11 would that contradict public -- but not two and not one,

12 would that contradict public policy?

13 MR. ROBERTS: If the -- the question would come

14 up when someone wanted to enforce a contract.

15 QUESTION: The contract says three strikes and

16 you're out, not two, not one. Then on the second time the

17 employer comes and says, well, you know, this violates

18 public policy, we want him out.

19 MR. ROBERTS: Yes, it would not prevent the

20 application of the public policy exception. The -- in

21 every case that the question comes up, whether it's this

22 case or the Kensington --

23 QUESTION: So that would be a valid argument by

24 the employer. In other words, he --

25 MR. ROBERTS: It would not prevent the court --

8

1 QUESTION: There is in your view a public policy

2 which would prohibit a three-strikes clause of the kind I

3 describe?

4 MR. ROBERTS: Well, what it would prohibit,

5 depending on the circumstances, and the Town of Newton

6 case said this is a very fact-intensive inquiry on the

7 court's part, when the court is asked to enforce the two

8 strikes, and he should be fired, the fact that the

9 contract provided three strikes doesn't act as an absolute

10 bar. It is always the case when the public policy

11 question comes up that the contract provides something

12 else.

13 QUESTION: Well, Mr. Roberts, you've referred to

14 the public policy exception several times. Would you

15 state your version of the public policy exception?

16 MR. ROBERTS: Yes. The public policy exception

17 is the one this Court articulated in Town of Newton, which

18 is that courts have not only the authority but the

19 obligation to decline to enforce contracts that are

20 illegal or that violate public policy.

21 Now, to determine whether they violate public

22 policy, what this Court did was adopt the Restatement

23 test, one that has been developed over centuries of common

24 law, which asks whether the interests in enforcing the

25 agreement are outweighed in the circumstances by a public

9

1 policy harm by the enforcement of the agreement.

2 QUESTION: That's just kind of boiler plate.

3 MR. ROBERTS: Well --

4 QUESTION: I mean, how would you -- can you

5 amplify it at all?

6 MR. ROBERTS: Certainly. The public policy in

7 this case is the public policy against the use of illegal

8 drugs by those in safety-sensitive positions. Now, that

9 policy is well-defined, because Congress and the executive

10 have said what those positions are, not the courts.

11 Congress and the executive have said it covers these

12 substances, not the courts, and the policy is so strong

13 that Congress has said, we're going to test you to make

14 sure that the policy is implemented, and Congress and the

15 executive have said how that testing should be done, and

16 how often. The courts --

17 QUESTION: How does the policy differentiate

18 between two strikes and three strikes?

19 MR. ROBERTS: Well, at that point you get into

20 the fact-intensive weighing that this Court in Town of

21 Newton says, said has to be done. In other words, you

22 have to look at all of the circumstances and determine

23 whether that policy --

24 QUESTION: Does that mean any -- one judge might

25 say, well, one strike's enough for me, that's the end of

10

1 the ball game?

2 MR. ROBERTS: Well --

3 QUESTION: Another judge might say, two strikes,

4 and still another might say three strikes. How do we know

5 which is the right number?

6 MR. ROBERTS: With respect to the one strike I

7 think the regulations would prevent that in most

8 situations, because they contemplate that in some

9 circumstances you can be reinstated, so there should not

10 be an absolute rule of one strike and you're out.

11 Now, the objection Your Honor raises is the same

12 objection that could have been raised in the Town of

13 Newton case. How do you tell which release dismissal

14 agreement violates the policies underlying section 1983?

15 It's an objection that has been raised with respect to the

16 public policy exception since the beginning. Go back to

17 the Muschany case and even before that.

18 And yet the exception has endured because the

19 courts have recognized that if courts do not ensure that

20 contracts do not violate public policy, no one else can.

21 QUESTION: Whenever the policy applies, I take

22 it it trumps the contract.

23 MR. ROBERTS: Absolutely, yes.

24 QUESTION: What do you look to for -- now,

25 you've talked about the DOT regulations, which obviously

11

1 have some -- are there other sources to be relied on here?

2 You say something about the congressional -- in testing --

3 MR. ROBERTS: Well, one -- yes -- well, in the

4 testing, but what the Court said in Muschany, repeated in

5 Grace and in Misco, is, courts just don't pluck these

6 policies out of the air. You have to look to the laws and

7 legal precedents. You look to the testing act, the DOT

8 regulations, the drug-free work place acts, and one thing

9 they establish is a strong policy of deterrence.

10 They didn't think that by imposing this testing

11 regime they would catch everybody who's using drugs. What

12 they thought was, if people knew they were going to be

13 tested and consequences were going to flow from that,

14 people would stop using drugs.

15 QUESTION: Well, do you -- do we say there's a

16 firm public policy that a repeat offender may not be

17 restored to a job affecting public safety?

18 MR. ROBERTS: Yes. I think --

19 QUESTION: Is that the policy?

20 MR. ROBERTS: I think it is. Now, there may

21 be --

22 QUESTION: How -- and do we look to the DOT regs

23 as part of that determination?

24 MR. ROBERTS: I -- first of all, I think that's

25 the policy as a general matter. I don't think -- again,

12

1 this is not an area where the Court adopts general

2 categorical rules. For example, if the two tests are 15

3 years apart, or something like that, perhaps in that

4 situation it doesn't make sense to say you cannot be

5 reinstated. That of course is not the situation here.

6 QUESTION: Mr. Roberts, the indeterminacy of all

7 this I think is what is bothering a lot of us, and let me

8 put the question slightly different from the way others

9 have done.

10 It seems to me that in considering a public

11 policy exception here we are in a different -- we at this

12 particular Court in this context are in a different

13 position from courts simply sitting in the traditional

14 common law circumstances in which you have two independent

15 contracting parties, and we're in a different position

16 because in fact we've got a labor contract here, and we

17 have a body of law which I assume we can rely on which

18 places tremendous value on the process of arbitration

19 under CVA and respect for the arbitrator's agreement --

20 determination.

21 So that if we are going to provide a public

22 policy, or recognize a public policy exception here, it

23 seems to me that it's got to be one in which the force of

24 the public policy thought to be inconsistent with the

25 arbitrator's award has got to be very, very, very clear

13

1 and strong and so on. It's not the kind of, or the degree

2 of public policy that might satisfy a traditional common

3 law context.

4 Given the high degree of persuasiveness that the

5 policy has got to have to overcome these presumptions, is

6 there any way, practical way to administer it short of

7 what the Court did, and that in effect is to say, look,

8 you've got to have inconsistency with positive law?

9 MR. ROBERTS: Well, first of all, the

10 application of the exception is in no way inconsistent

11 with the deference to arbitrators. In the Grace case,

12 which involved --

13 QUESTION: Well, it is if you set the strength

14 of the policy too low. I mean, that depends on how strong

15 the policy has got to be. If --

16 MR. ROBERTS: You have --

17 QUESTION: Go ahead.

18 MR. ROBERTS: You have a common law rule that

19 authorizes and obligates courts to apply this, and the

20 argument, as I understand it, and it is the union's

21 argument, is that you should have an exception to that

22 rule in the labor area because we defer to arbitrators,

23 but we defer to arbitrators because they have expertise in

24 the interpretation of a collective bargaining agreement.

25 That is not the question when it comes to public policy.

14

1 As this Court --

2 QUESTION: Well, except that up to a point it

3 is, because as I understand the DOT regs in effect -- I

4 think the phrase that has been used, leave the issue of

5 when you can fire, or whether you can fire for a repeat

6 offense, to private ordering, so it is in fact an issue of

7 the meaning of the contract, and the arbitrator is right

8 smack in the middle of what the arbitrator is best at

9 doing when the arbitrator makes a decision like this.

10 MR. ROBERTS: Well, no. That depends on what

11 the collective bargaining agreement provides, and

12 collective bargaining agreements do not shape public

13 policy. They shape a private agreement between an

14 employer and a union, and as this --

15 QUESTION: No, they don't, but the -- when the

16 agreement -- when the private ordering addresses this

17 subject, and the arbitrator is applying that agreement,

18 the arbitrator is acting in sort of a quintessential

19 arbitrator's role, so that it's quite true the arbitrator

20 doesn't -- isn't a separate source, perhaps, of public

21 policy, but the arbitrator's decision is entitled to the

22 greatest deference that it's ever entitled to.

23 MR. ROBERTS: As this Court said in the Wright

24 decision, the deference that is accorded arbitrators is

25 limited by the rationale that supports it.

15

1 QUESTION: Mr. Roberts, do you agree that an

2 arbitrator's decision arbitrating a collective bargaining

3 agreement is somehow entitled to more weight than an

4 arbitrator interpreting a provision under the Federal

5 Arbitration Act?

6 MR. ROBERTS: No, Your Honor. I think they're

7 both entitled to the same weight, and all that the

8 arbitrator's decision does is tell you what the parties

9 agreed to. They say, this interpretation is binding on

10 the parties.

11 Well, that just poses the question that is

12 presented. When you have an application of the public

13 policy doctrine you assume that the parties have agreed to

14 something else. In the Kensington case, Mrs. Bleaker

15 signed an agreement limiting her -- the liability of the

16 company to 250 francs.

17 QUESTION: All right, so in this case, then, to

18 get right to the facts of it, which -- facts-intensive, we

19 assume that the parties agreed that an appropriate remedy

20 for a person who is found with marijuana twice, and there

21 are extenuating circumstances, is a $10,000 fine, in

22 effect, and rehabilitation, and reinstatement if he tests

23 negative.

24 Now, how can we say that's against public

25 policy? If you were in California the criminal law

16

1 provides the most severe penalty that could be attached to

2 a second possession of 26 grams is a $100 fine. So here

3 we have 30 million people in the State of California

4 saying a $100 fine is the appropriate thing. In West

5 Virginia, I take the highest fine would have been $1,000

6 under the criminal law.

7 And now here, the arbitrator says it's going to

8 be $10,000 and testing negative, rehabilitation,

9 reinstatement, so how could we say in this case it's

10 against public policy and he has to be fired?

11 MR. ROBERTS: Because the criminal sanctions

12 that Your Honor addressed don't take into account what the

13 contract enforcement is going to bring about, and that is,

14 putting this individual, who in the course of 15 months

15 failed two tests for illegal drugs, behind the wheel of a

16 25-ton vehicle on the roads in West Virginia.

17 QUESTION: Yes, but how does the -- how does a

18 court know that that individual, when he gets behind the

19 wheel on Monday morning, is any more of a risk to the

20 people on the road than the guy who had three martinis on

21 Saturday night and is sober on Monday morning and gets in

22 the truck?

23 MR. ROBERTS: Again --

24 QUESTION: How do we -- how does a court know

25 that?

17

1 MR. ROBERTS: The court knows that because

2 Congress told it that. Congress drew a distinction in the

3 testing act. It said, when we test for alcohol we test

4 when you're there performing the functions, because you

5 have to be sober. It's all right if you're going to have

6 a drink on Saturday night.

7 And it took a different approach when it came to

8 illegal drugs. It said where --

9 QUESTION: Mr. Roberts, may I ask you if the

10 arbitrator had left leeway to the employer to put this

11 person in a nonsafety-sensitive job, then would you say,

12 well -- what would you say about public policy then?

13 The -- everything is the same, that he gets stopped

14 $10,000 or whatever it was pay, and he has to go through

15 the drug rehabilitation program, and at the end of the

16 line the employer can put him back in a nonsafety

17 sensitive position.

18 MR. ROBERTS: The issue there would be whether

19 that undermined the deterrent effect of the testing

20 program. In other words, if the consequence for taking

21 drugs and putting the lives of the traveling public at

22 risk is you get a desk job rather than you're behind the

23 wheel, that would undermine what Congress was trying to

24 do.

25 QUESTION: Would the public -- would the

18

1 argument -- in other words, you're telling me that the

2 public policy as you perceive it would say, this person is

3 out, even if there's a nonsafety-sensitive job that he

4 could be given?

5 MR. ROBERTS: In the -- on the facts of this

6 case, in other words a second positive test, not the first

7 test, I think yes, although the argument for public policy

8 would not be as strong.

9 QUESTION: Then why -- I'm sorry.

10 MR. ROBERTS: I was just going to emphasize that

11 what Congress sought to achieve, and what the Department

12 of Transportation is seeking to achieve, is deterrence,

13 and if the consequences are so minimal, as in Your Honor's

14 hypothetical, that undermines the deterrent effect. How

15 do the other drivers who are subject to this test take it

16 seriously, when they see someone who's failed twice --

17 QUESTION: $10,000 is minimal? I mean, if the

18 Department of Transportation had adopted its reg that

19 favors your position, I take it they would have insisted

20 on a 60-day suspension. They didn't even adopt it, but if

21 it had been adopted, then it would have been satisfied

22 here.

23 MR. ROBERTS: Well, Your Honor, we don't know

24 why they didn't adopt it. They may not have adopted it --

25 QUESTION: All right. I see, yes.

19

1 MR. ROBERTS: -- because they thought

2 termination was --

3 QUESTION: Was -- that's true. What about

4 $10,000? I mean, why is $10,000 in light -- if you went

5 across the country, why is $10,000 a minimal -- a minimal

6 sanction for an ordinary worker who is a driver of a

7 truck? That sounds like a lot of money to me.

8 MR. ROBERTS: Because when you're dealing with a

9 second offense, someone who failed the first drug test

10 they had to take, then failed another one given 14 months

11 after they were reinstated, after they had been through

12 the rehabilitation process, we tried what the statute and

13 the regulations provide, and it didn't work.

14 QUESTION: Can you tell us a little bit --

15 QUESTION: -- why doesn't the regulation address

16 it, Mr. Roberts? I mean, I think that's the problem I had

17 with your answer to Justice Ginsburg's question and the

18 distinction that you were drawing in mine between the way

19 Congress treated alcohol and treated drugs.

20 If, in fact, it is so clear that the deterrent

21 effect would be vitiated unless there were a firing and so

22 on, why didn't DOT provide it, and the fact that DOT

23 didn't provide it seems to erect a caution sign in my mind

24 in the face of a court that purports to be able to infer

25 the clear public policy that you rest upon.

20

1 MR. ROBERTS: The assumption underlying your

2 question is that the regulation somehow occupies the

3 field. In other words, they addressed the full universe

4 of situations that can arise. They plainly did not.

5 There's --

6 QUESTION: Well, I'm not getting into so much a

7 technical kind of preemption as I am a practical kind of

8 psychology. If it was as clear as your argument seems to

9 assume it is, why wasn't it clear enough for Congress to

10 come out and say so in so many words?

11 MR. ROBERTS: I would suppose because neither

12 Congress nor the Department ever supposed you'd have an

13 arbitrator who would reinstate someone who failed two

14 tests within 15 months to this type of a position.

15 It's --

16 QUESTION: Mr. Roberts, could you comment on the

17 potential civil liability of the employer? Are there

18 cases -- let's assume an accident with a person who's

19 previously tested positive. I take it the employer would

20 be liable for punitive damages if he took no steps to

21 terminate the employee. If the arbitrator orders the

22 reinstatement, I take it that would be a defense against

23 punitive damages. Are there any --

24 MR. ROBERTS: I don't want to --

25 QUESTION: Are there any cases on this in the

21

1 lower courts?

2 MR. ROBERTS: I'm not aware of any, and I don't

3 want to limit what the company will be arguing in the

4 future, but if you accept the interpretation that the

5 arbitrator's decision is an interpretation of the

6 contract, I don't know how much of a defense that's going

7 to be.

8 QUESTION: It would be a matter of West Virginia

9 law in this case, I take it, if an accident occurred in

10 West Virginia.

11 MR. ROBERTS: Yes. Yes, Your Honor.

12 QUESTION: Well, it would be the company's own

13 fault. They signed the contract.

14 MR. ROBERTS: Well, I'm sure that's what the

15 argument --

16 QUESTION: They figured, you know, they traded

17 it for some other concessions by the union and they

18 thought this one was one they didn't care that much about.

19 MR. ROBERTS: I'm sure that's what the argument

20 would be.

21 QUESTION: So you know, you can't feel very

22 sorry for the company if that's what happens to them.

23 MR. ROBERTS: On the other hand, the contract,

24 like every contract, is subject to the public policy

25 exception. Now, it is an exception that is applicable

22

1 only in the rare case, but those cases do come up.

2 The union today is arguing that there's no role

3 for the courts here, but in the Jones Dairy Farm case it

4 was a union that was arguing for the public policy

5 exception against the management rule that employees had

6 to report unsanitary conditions only to management.

7 The Solicitor General is arguing against the

8 exception today, but when it was a Federal postal worker

9 that they were trying to fire and an arbitrator ordered

10 him reinstated, then the Solicitor General was saying no,

11 the court should vacate that arbitration award.

12 These situations come up with sufficient

13 regularity, sometimes the shoe is on one foot and

14 sometimes on the other, but the fact of the public policy

15 exception has to be recognized, and the one thing that is

16 clear, it seems, is that the lower court approach, which

17 said this is not illegal, therefore there's no role for

18 the public policy exception, is inconsistent with this

19 Court's decision.

20 The formulation has always been the public

21 policy exception applies to contracts that are illegal or

22 that violate public policy, and with respect --

23 QUESTION: What's the criterion of violation of

24 public policy going to be? I don't want to create a whole

25 tort law of drug-impaired drivers that the lower Federal

23

1 courts are going to have to decide how risky it was to put

2 this driver back on the road, how risky it was to put

3 another driver back on the road. This is just not the

4 kind of stuff the Federal courts are intended to be

5 dealing with.

6 MR. ROBERTS: No. There are two --

7 QUESTION: I want a clear line. I don't think

8 you can give us a clear line. In fact, you don't even

9 suggest a clear line. You say every case has to be

10 decided on its own facts.

11 MR. ROBERTS: Well, that's what the Court said

12 in Town of Newton, and I think it's correct. There is not

13 a clear line, but what the Court has said -- and there are

14 two aspects to the question. How do you tell what the

15 policy is, how do you tell whether it's violated.

16 On the policy question, what the Court has said

17 is, it has to be well-defined, and you have to point to

18 the laws of legal precedents. That's satisfied here. The

19 definition of this testing program is spelled out in

20 detail by Congress and the Department of Transportation.

21 QUESTION: Well, I don't agree with your

22 expression of what the public policy is, for one thing.

23 You say the public policy is what? You said that people

24 who drive dangerous vehicles shouldn't be users of illegal

25 drugs.

24

1 MR. ROBERTS: That's the policy of the testing

2 act. Congress has said that, and that is the policy that

3 is at issue here.

4 QUESTION: Yes, but DOT has indicated that at

5 least on the first offense there can be reinstatement, and

6 the regs are silent on the repeat offense, so what do we

7 make of that?

8 MR. ROBERTS: Well, what the regs say, according

9 to the Solicitor General, and we agree, is that it's left

10 to private ordering, and if it's left to private ordering

11 in the form of a contract, the public policy exception

12 applies.

13 Now, that's as far as we got in the lower

14 courts. Then the lower courts said, we're not going to

15 look at it because it's not illegal. One reason I think

16 it may be seen difficult to manage the application here is

17 that the district court hasn't done it, and the court of

18 appeals hasn't done it in this case.

19 QUESTION: But you agree it wouldn't be illegal,

20 because you -- in answer to my question you said if the

21 employer wants to keep this person on, he could. It

22 wouldn't be violating any law or regulation.

23 MR. ROBERTS: That's an important limitation on

24 this, is on the public policy exception, which is that it

25 only applies when the courts are asked to enforce the

25

1 contract.

2 QUESTION: He wouldn't be violating any law or

3 regulation, but he also wouldn't be asking the court to

4 cooperate in his --

5 MR. ROBERTS: He wouldn't be making the court --

6 QUESTION: -- in his insouciance.

7 MR. ROBERTS: He wouldn't be making the court an

8 accomplice to the violation of public policy. He would be

9 restrained, of course, by tort law.

10 I'd like to reserve the remainder of my time,

11 Your Honor.

12 QUESTION: Very well, Mr. Roberts.

13 Mr. Mooney, we'll hear from you.

14 The second question presented is, should

15 arbitration awards be vacated on public policy grounds

16 only when the award itself violates positive law or

17 requires unlawful conduct by the employer? Sometime in

18 your argument, will you tell us your position on that?

19 ORAL ARGUMENT OF JOHN R. MOONEY

20 ON BEHALF OF THE RESPONDENTS

21 MR. MOONEY: Yes, Mr. Chief Justice, and may it

22 please the Court:

23 We believe that the Court doesn't need to reach

24 the unanswered question in footnote 12 of Misco because

25 the standard that the Court announced in Misco, which was

26

1 basically affirmed in Grace, provides ample analytical

2 framework for this Court and any court to analyze this

3 case.

4 What Misco taught us is that in the 301 context,

5 a court may refuse to enforce an arbitrator's award

6 because it is contrary to public policy if and only if it

7 violates an explicit public policy that is well-defined

8 and dominant, and is ascertained by an examination of laws

9 and legal precedents, and not general supposed notions of

10 public interest. Only if there is an explicit conflict

11 with the public relevant public policy can the arbitration

12 award or contract in the 301 context be struck down.

13 Eastern challenges under the guise of public

14 policy an arbitration award that was rendered pursuant to

15 the parties' collective bargaining agreement, which

16 reinstated an employee who had tested positive for

17 marijuana. The policy that it uses is the policy embodied

18 in the omnibus Transportation Employee Testing Act of 1991

19 and the regulations issued by the Department of

20 Transportation pursuant to that statute.

21 An examination of the statute and the

22 regulations reveals a comprehensive public policy. It is

23 not merely deterrence. It is not merely to take employees

24 out of driving dangerous vehicles, although we agree it is

25 in there. It also has a statutory purpose of

27

1 rehabilitation and a return to duty for these employees.

2 The basic framework of the statute, as we see

3 it, and the regs issued pursuant to that, is detection of

4 these employees, removal from the safety-sensitive

5 position --

6 QUESTION: It seems to me like saying that when

7 you have a criminal law that provides sending a person who

8 commits a certain crime to prison for only 10 years there

9 are two policies involved, one that he should be punished

10 for doing whatever he did wrong, and secondly that such

11 people should be released after 10 years, and I don't know

12 that that's a public policy. I mean, it's just a

13 limitation upon the first public policy.

14 I don't know that I would express it to be a

15 policy in and of itself that there should be

16 rehabilitation of people, and that people who have

17 violated proscriptions against the use of illegal drugs

18 and driving dangerous vehicles, we want these people to be

19 rehabilitated. I don't see that as a policy in and of

20 itself. It's simply a limitation on the other policy.

21 MR. MOONEY: I would disagree, Justice Scalia,

22 because the statute specifically refers to rehabilitating

23 these employees, and that was one of the policy goals, so

24 I don't view it as a separate policy. We would view it as

25 part of the policy embodied in the statute and the

28

1 regulations, and of course there's not just a penal aspect

2 to the regulations that we have here. What it does is

3 send these employees to a substance abuse professional who

4 must evaluate them, develop a plan, and that employee must

5 successfully complete that plan prior to being eligible to

6 return.

7 QUESTION: Let me ask you this. Do you contest

8 that it is a clearly defined public policy that persons as

9 to whom there is a substantial risk because of prior drug

10 use, that they will be under the influence of drugs when

11 driving dangerous vehicles, should not be behind the

12 wheels of such vehicles?

13 MR. MOONEY: Oh, we agree with that --

14 QUESTION: Okay.

15 MR. MOONEY: -- Justice Scalia.

16 QUESTION: Now, what if a -- an arbitrator under

17 an arbitration clause such as this said in his award, I

18 really think there is a substantial risk that this person

19 will use drugs again and perhaps drive a vehicle while

20 he's still under the influence of drugs again.

21 Nonetheless, despite that substantial risk, I think we

22 should give him another chance. Would you allow a Federal

23 district court to set aside that arbitration decision?

24 MR. MOONEY: Your Honor, what we would do is go

25 back to the framework of Misco. We would take the public

29

1 policy as established. We would take that award, which

2 includes the remedy that the arbitrator crafted, and in

3 the balancing of all the circumstances, apparently the

4 arbitrator in your situation still thought it was

5 appropriate to return that employee to duty.

6 QUESTION: He thought so despite the fact that

7 there was a substantial risk that he would endanger the

8 public again by being under the influence of drugs again.

9 He says that explicitly. I acknowledge there's a

10 substantial risk that this will happen, but I think -- I'm

11 a tender-hearted fellow -- he should be reinstated anyway.

12 MR. MOONEY: So long as he complies with the

13 statutory and regulatory prerequisites, and so long as

14 that remedy is within the scope of the arbitrator's

15 commission, we believe that that arbitration award should

16 be enforced.

17 QUESTION: Well, I don't know what there is left

18 of the public policy exception if you allow an arbitrator

19 to essentially disregard it. You acknowledge it's a

20 public policy not to undertake that substantial risk. The

21 arbitrator says there is that substantial risk, but you

22 nevertheless say we're going to let the arbitrator under

23 the contract force the employer to put the man back on the

24 road.

25 MR. MOONEY: Well, Your Honor, that's what we

30

1 would posit would be the appropriate standard. That

2 really goes to the second question, which is the

3 unanswered question in Misco, although I doubt an

4 arbitrator would do that, and I am not aware of any

5 circumstance --

6 QUESTION: Well, suppose an arbitrator did do

7 that for a transportation company. He says, I think this

8 guy is going to drive around getting into an accident with

9 earth-moving equipment, but I'm still going to send him

10 back to his job. Do you think an award like that would

11 draw its essence from the contract?

12 MR. MOONEY: If we had the question of whether

13 it draws its essence from the contract we would go under

14 the established guidelines since Enterprise Wheel, and

15 perhaps that would not do that. We think the law --

16 QUESTION: All right. So if it would not do

17 that -- I mean, it's an awfully odd award that a

18 transportation company has to hire back somebody who they

19 think is going to get into an accident.

20 MR. MOONEY: We don't quibble with the

21 jurisprudence that the courts have developed ever since

22 Enterprise Wheel. We think the courts have not had great

23 difficulty in following that, and we recognize that some

24 arbitration awards that have idiosyncratic developments

25 have been struck down, vacated, or a court's refused to

31

1 enforce that.

2 QUESTION: Well, is it easier for the courts to

3 say, a) that it's against public policy, or b) that it

4 does not draw its essence from the contract? Which is the

5 more precise doctrine?

6 MR. MOONEY: Well, we would view the Misco

7 public policy exception as part of an overall deference to

8 labor arbitration, the 301, that goes back to Lincoln

9 Mills and then comes through the Steelworkers Trilogy, so

10 I don't know if there's -- how you would attempt to

11 analytically put that in a box, Justice Kennedy.

12 QUESTION: Well, I had thought Justice Breyer's

13 question suggested that there might be another way to

14 answer Justice Scalia's hypothetical by saying, oh, well,

15 this doesn't draw its essence from the contract, and I'm

16 asking you if that's any more precise, any more clear, any

17 more categorically manageable from the standpoint of

18 appellate review than the public policy is. It seems to

19 me it might not be.

20 MR. MOONEY: I'm not so sure it would be more

21 clear, but I think it would be -- your reference still

22 goes back to the Misco analysis when someone raises public

23 policy -- when someone is attempting to avoid compliance

24 with their own contract by reason of invocation of the

25 public interest, certainly we have to use the analytical

32

1 framework developed in Misco. We believe that that

2 framework has worked, for the most part.

3 We think it should be affirmed just as we

4 originally had it in Grace, and we see what happened in

5 Grace is that the Court's explicit recognition of a public

6 policy exception in the 301 context perhaps encouraged

7 courts, invigorated them to look at labor arbitration

8 awards under the public policy exception, and the Court

9 had to come back in Misco and remind all of us what it

10 meant in the Grace decision, and we think that the Misco

11 standard --

12 QUESTION: Well --

13 MR. MOONEY: -- is still perfectly applicable.

14 QUESTION: -- let us assume that Justice

15 Breyer's question suggests the possibility that the

16 standard of not drawing the award from the essence of the

17 contract gives the courts more latitude than the public

18 policy argument to set aside arbitrators' awards. Would

19 you agree with that?

20 MR. MOONEY: The difficulty I have, Justice

21 Kennedy, is whenever you look at the question of, does it

22 draw its essence from the contract, you must examine the

23 contract.

24 QUESTION: Well, isn't another difficulty that

25 you -- it's -- drawing its essence from the contract is

33

1 very contract-specific, whereas presumably the public

2 policy thing might be more general?

3 MR. MOONEY: Well, Mr. Chief Justice, you

4 articulated better than what I was trying to say, is that

5 in a Enterprise Wheel case the first duty the court would

6 look at in an arbitration award would be, what is the

7 labor contract? Is there a just cause provision? Are

8 there strictures on the commission of the arbitrator?

9 That's the first line of inquiry.

10 Those really don't come in under the Misco

11 analysis as directly as under the Enterprise Wheel

12 analysis. Misco says that there must be an articulated,

13 well-defined, dominant public policy in the laws and legal

14 precedents, and only if that policy is violated by the

15 award can it be struck down in the 301 context.

16 QUESTION: Well, why --

17 QUESTION: But you do acknowledge that there is

18 a general public policy against having people who use

19 prohibited drugs from driving dangerous vehicles.

20 MR. MOONEY: Justice O'Connor, we certainly do,

21 and we look to that policy as articulated perhaps best by

22 the policymaker itself in this area, which is the

23 Department of Transportation. The policymaker itself has

24 told us how that policy is to work in situations like

25 Mr. Smith's.

34

1 QUESTION: But Mr. Roberts says that that policy

2 is silent as to what should be done to recidivists. Now,

3 do you agree with that or not?

4 MR. MOONEY: I part company with Mr. Roberts in

5 analyzing that question. The question of repeat

6 offenders, recidivists, was considered by the agency in

7 its rule-making. Initially there was a proposal that

8 would have a sanction for a second offense of a 60-day

9 period outside the safety-sensitive position, or removal

10 from work, suspension.

11 After receiving comments, the agency did not

12 adopt that standard. What it did do is remind us that the

13 sanction for failing the rehab program, which is in

14 essence what happened, is the same as in alcohol testing,

15 which is you will be removed, rehabilitated, and eligible

16 for return to service.

17 QUESTION: Return to what service? That was a

18 question that I asked Mr. Roberts, and I'm not sure what

19 the situation is in this very case. As you understand the

20 arbitrator's award, is there instruction that after the

21 rehabilitation period this man is to be returned to the

22 job of driver, or consistent with that award could the

23 company give him work in a nonsafety-sensitive position?

24 MR. MOONEY: Your Honor, we would read the award

25 as stating that Mr. Smith was to return to work on

35

1 October 20 of that year. If he had satisfactorily

2 completed the program, as he had, to return to the

3 safety-sensitive position, we would say he should get that

4 position. If he has not completed that program, our

5 reading would be that he return to employment consistent

6 with the other provisions of the collective bargaining

7 agreement.

8 QUESTION: But I think then you're going beyond

9 the award, but you've been very candid, I think, if I

10 understand what you said, that this award says if he

11 passes the rehabilitation course he goes back in the

12 driver's post.

13 MR. MOONEY: That's our reading of the award,

14 Justice Ginsburg, is that Mr. Smith, once he satisfies the

15 prerequisites contained in the statute, which is referral

16 to the SAP, completion of that process, successful

17 evaluation by the SAP, and then a return-to-duty test,

18 which he has not taken -- he was ready, willing and able

19 to take it. Once he satisfies all of those prerequisites,

20 he should be able to return to his MEO job.

21 QUESTION: I read it that way, too. That's the

22 only way to understand why he should have to be

23 rehabilitated. He can still be a pot-head and do a desk

24 job as far as public policy is concerned, right?

25 (Laughter.)

36

1 QUESTION: Why make him go through the

2 rehabilitation if you're not looking to his driving a rig

3 again? So I agree with you on the interpretation of the

4 award, but I don't understand how you can think that the

5 Secretary, by not addressing recidivists, is in effect

6 saying recidivism doesn't matter.

7 It seems to me the fact that they didn't apply

8 automatic disqualification for recidivism only means, you

9 know, there are all sorts of circumstances that may exist,

10 and we're not willing to say categorically that somebody

11 can never come back, but that doesn't answer the question,

12 certainly, whether, when you have a person whom -- in my

13 hypothetical, the arbitrator acknowledges that there is

14 significant risk that this person will be under the

15 influence of drugs again behind the wheel.

16 When the arbitrator finds that and nonetheless

17 puts him back behind the wheel, public policy isn't

18 violated. I don't think the failure of the regs to

19 address that situation is anything except silence.

20 MR. MOONEY: We would disagree, Justice Scalia.

21 We believe that the agency has not precluded these

22 employees from coming back once they've satisfied the

23 statutory prerequisites, but the hypothetical that you

24 posit would probably be a vehicle for the Court to address

25 the question that it did not reach in Misco, which is

37

1 reserved in footnote 12.

2 QUESTION: And we're asking you how the Court

3 should answer that question.

4 MR. MOONEY: We believe, as the union did in

5 Misco, that the appropriate standard in that case, Justice

6 Kennedy, would be that unless the contract or the award

7 giving life to that contract violates positive law, it

8 should be enforced, and we have several reasons for why we

9 view that that is the appropriate standard if the court

10 was to need to reach it.

11 QUESTION: But you say we shouldn't reach it

12 because this case doesn't stretch that far, because here

13 the arbitrator said this, then, has given me a very

14 special reason. I believe him. I think that he's off

15 drugs except there was this terrible thing, and I believe

16 him, and I -- that's why I'm going to give him one more

17 chance.

18 MR. MOONEY: Justice Ginsburg, we think to

19 answer this case, there's only four places the Court needs

20 to look. One is the Misco decision for the analytical

21 guidelines on how to evaluate public policy challenges in

22 the 301 context. Two, we need to look to the DOT

23 regulations, which give us the public policy that we are

24 looking for. Three would be the collective bargaining

25 agreement, which authorizes an arbitrator to make these

38

1 sort of just cause decisions, and the fourth would be

2 Arbitrator Barrett's award.

3 If you view the award through the prism of

4 Misco, it's clear that the award should be enforced. We

5 think that that's how easily this case can be resolved.

6 But if the Court does intend to reach the second question,

7 we believe it is important that the Court analyze this

8 within the section 301 jurisprudence.

9 The policies that animate 301 have been

10 well-established since Lincoln Mills back in 19 --

11 QUESTION: Why should 301 be more dominant than

12 the Federal Arbitration Act? Both encourage great

13 deference to arbitrators.

14 MR. MOONEY: Your Honor, we would view 301 as

15 distinct. As we understand the common law notion, the

16 courts, whatever powers they may have, had under the

17 public policy exception, they did not act in a position in

18 contradiction to the legislature. The legislature is the

19 traditional body that establishes public policy.

20 In enacting the National Labor Relations Act, we

21 believe that the legislature, Congress, did establish the

22 public policy. If you look at sections 171 and 173 of

23 title 29, it's 201 and 203 of the act, it clearly tells us

24 that labor contracts really are something different than

25 commercial contracts.

39

1 We are balancing public policy of collective

2 bargaining, telling the bargaining parties that they

3 should privately order their own affairs, and so long as

4 what they do is lawful, we're not going to interfere with

5 that.

6 QUESTION: Does the arbitrator -- is the

7 arbitrator under an obligation, or, indeed, to your

8 knowledge does the arbitrator as a routine matter take

9 into account public policy?

10 MR. MOONEY: Your Honor, we believe that

11 arbitrators routinely take into account those

12 considerations, the examination of external law. As the

13 National Academy points out on pages 18 to 20 of its

14 submission to the Court as amicus on our behalf, this is

15 the sort of thing that numerous arbitrators do and,

16 indeed, Arbitrator Barrett did here.

17 So long as the arbitrator is staying true to his

18 commission he can and should look at those other

19 considerations. That's why people select the arbitrators,

20 is they have the specialized judgment, as the Court

21 recognized in Gateway Coal, to resolve those questions.

22 Certainly an arbitrator can look at those external sources

23 and use the benefit of those to craft a remedy.

24 QUESTION: The trouble is, you know, the Court

25 represents the public, and that's how the Court can apply

40

1 the public policy exception. The arbitrator at best

2 represents both the parties, so you're giving over the

3 protection of this public policy to the parties.

4 MR. MOONEY: The background of our case, Justice

5 Scalia, is that the public, the balancing of these

6 competing interests has been drawn by the Department of

7 Transportation. They were the agency delegated by

8 Congress responsibility for enfurthering the testing act

9 procedures in conformance with the goal of highway safety.

10 That agency draw the balance. It accommodated

11 and acknowledged both the interest of the public and the

12 safety of the highways and the interests of the employees

13 in being rehabilitated and returned to service, and the

14 interest of employers. They drew that balance. It drew

15 that balance. Perhaps we would quibble with that, but --

16 QUESTION: Thank you, Mr. Mooney.

17 MR. MOONEY: -- we don't believe we should

18 second guess it.

19 QUESTION: Mr. Stewart, we'll hear from you.

20 ORAL ARGUMENT OF MALCOLM L. STEWART

21 ON BEHALF OF THE UNITED STATES, AS AMICUS CURIAE,

22 SUPPORTING THE RESPONDENTS

23 MR. STEWART: Mr. Chief Justice, and may it

24 please the Court:

25 The arbitrator in this case treated the

41

1 employee's drug use as a serious offense. He considered

2 it worthy of serious punishment. With respect to those

3 aspects of the arbitrator's decision, the petitioner

4 really has no complaint.

5 Petitioner contends that the arbitrator's award

6 is contrary to public policy only in that the arbitrator

7 chose to impose a suspension of slightly over 3 months

8 plus costs of the arbitration in lieu of outright

9 discharge, and therefore the question is whether the

10 punishment imposed by the arbitrator can reliably be said

11 to conflict with public policy.

12 This Court emphasized in Misco that a court

13 asked to vacate an arbitral award in the labor context on

14 the basis of public policy must draw that policy from

15 positive law, from statutes and regulations.

16 QUESTION: Mr. Stewart, what's the Government's

17 position on question 2 that's presented?

18 MR. STEWART: We would say that there are

19 limited circumstances under which an arbitral award can be

20 vacated even though the award would not compel the

21 employer to violate positive law, and to give you a

22 hypothetical example, the Department of Transportation has

23 a regulation that says that a driver who is convicted of

24 driving under the influence is disqualified from operating

25 a commercial motor vehicle for a period of 1 year.

42

1 Now, in a hypothetical case in which an employee

2 was believed to have driven under the influence, was not

3 convicted, but conceded at the arbitral proceeding that he

4 had, in fact, driven while under the influence of alcohol

5 and drugs, in such a case, if the arbitrator imposed a

6 3-month suspension and then put the person back behind the

7 wheel, that would not literally compel the employer to

8 violate positive law because there would be no conviction.

9 But given that there was an alternative basis

10 for feeling highly confident that the prohibited conduct

11 had occurred, such an award would be explicable only on

12 the ground that the arbitrator disagreed with the policy

13 judgment reflected in the DOT regulations.

14 But we do -- while we don't think that the

15 vacatur of the award is limited to those situations in

16 which a violation of positive law would otherwise occur,

17 we do think that the relevant public policy must be drawn

18 directly from positive law, and therefore the question is,

19 is there anything in the testing act or the DOT

20 regulations that identifies discharge as the mandatory

21 penalty for a second drug offense or not, and in our view

22 there's no way that the regulations or the statute can

23 fairly be read to compel that conclusion.

24 QUESTION: Well, they can't compel that

25 conclusion, but wouldn't you say it's part of the public

43

1 policy, a clear part of the public policy, that a -- that

2 where there is a substantial possibility that a person who

3 has been a drug user will be under the influence of drugs

4 while driving, that person should not be put behind the

5 wheel?

6 MR. STEWART: I think that's correct --

7 QUESTION: All right.

8 MR. STEWART: -- and I think the DOT reg -- but

9 I think the DOT regulations --

10 QUESTION: So you would acknowledge that if the

11 arbitrator's finding in this case could be characterized

12 as ignoring that substantial possibility, it could be set

13 aside?

14 MR. STEWART: We wouldn't say that, because in

15 our view the DOT regulations provide an alternative basis

16 for preventing that, that feared result from occurring.

17 That is, regardless of whether the arbitrator orders this

18 person reinstated, the person is not eligible under the

19 regulations to drive a commercial vehicle until he

20 complies with DOT's rehabilitation requirements.

21 And if he's evaluated by the substance abuse

22 professional, if the substance abuse professional

23 certifies that he has complied with the recommended course

24 of treatment and that the employer is therefore legally

25 free to employ him again in driving a truck, that provides

44

1 the basis for assurance that a person who poses a

2 substantial risk will not be on the roads, and --

3 QUESTION: Who are these substance abuse

4 professionals who have the unfortunate acronym SAP's?

5 (Laughter.)

6 QUESTION: Do you get a certificate as a SAP, or

7 what --

8 (Laughter.)

9 MR. STEWART: The SAP's, as we refer to them,

10 are not -- they're not certified by the Department of

11 Transportation, but the regulations do specify the

12 categories of people who are eligible to perform this

13 service, and the regulations also make clear that the

14 choice of a particular SAP is up to the employer unless

15 the employer has delegated that power away through

16 collective bargaining agreement, so the employer has the

17 ultimate power to ensure that this important decision is

18 not being entrusted to someone, somebody that the employer

19 believes is insufficiently protective of the public

20 safety.

21 QUESTION: Mr. Stewart, do you think that there

22 is a difference and that public policy overrides, say,

23 something that would just come under the FAA, a question

24 the Chief asked, say a consumer contract that's drawn by

25 the seller, and that's dictated the contract, and a --

45

1 adding on top of the collective bargaining contract public

2 policy in the case of a -- of an employer-union negotiated

3 contract?

4 MR. STEWART: Well, we would certainly agree

5 with the Chief Justice that there is also a strong policy

6 reflected in the language of the Federal Arbitration Act

7 in favor of enforcement of arbitration agreements in the

8 commercial context.

9 There is in the labor context the additional

10 consideration of preserving industrial peace, but we

11 don't -- I don't know that we would say that the two are

12 different in kind.

13 Now, certainly in the State system it is up to a

14 State government to determine how it wants to allocate

15 power among the branches, and therefore State courts may

16 assume far greater authority to devise public policy to

17 set aside contracts that violate it even if they aren't

18 drawing the relevant public policy from positive law.

19 That's up to the State system.

20 But within the Federal system I think even

21 whether within the FAA, or under the labor management

22 statutes, there is a strong policy in favor of

23 enforcement of contractual choices.

24 And so in 1992 to 1994 the Department of

25 Transportation conducted an extensive rule-making, it

46

1 heard comments from a number of interested people, and its

2 mandate from Congress was to consider both the need to

3 protect the public safety against the ill effects of

4 transportation employees who use drugs, and the testing

5 act also included a congressional finding that

6 rehabilitation is a critical component of any testing

7 program.

8 And it was the Department's mandate to balance

9 those potentially competing objectives, and specifically

10 with respect to the problem of a recidivist drug user, the

11 initial regulation proposed by the Department of

12 Transportation would have mandated a 60-day

13 disqualification period.

14 And I think, as Justice Breyer suggested, part

15 of the irony of this case is that if that provision had

16 been adopted, we think the petitioner would have no basis

17 for challenging the arbitral award here, because if DOT

18 had said, suspension of at least 60 days, and the

19 arbitrator had imposed a suspension of a little over 3

20 months --

21 QUESTION: May I ask this question, following up

22 on some of Justice Scalia's? Do you think there's a

23 public policy that would require arbitrators in cases such

24 as this to assess the likelihood of recidivism in the

25 future?

47

1 MR. STEWART: I think it all depends on what

2 powers the parties elect to confer upon the arbitrator.

3 That is, if the collective bargaining agreement specified

4 that the punishment for a first positive drug test will be

5 a 30-day suspension followed by reinstatement if the

6 individual has complied with the DOT regulations, I think

7 there would be no room under the contract for the

8 arbitrator to say, I'm not sufficiently confident that

9 this person can do the job again, and therefore I'm

10 ordering him discharged.

11 And conversely, if the collective bargaining

12 agreement said, anybody who violates the drug policy twice

13 will be dismissed, the arbitrator wouldn't have authority

14 to determine that really the policy in favor of

15 rehabilitation was more important and therefore he should

16 be given another chance.

17 But where, as here, we have a collective

18 bargaining agreement that gives the arbitrator very broad

19 discretion to decide whether there is just cause in a

20 particular case, we think the arbitrator would naturally

21 look to public policy considerations, among others.

22 QUESTION: So you would say he would sometimes

23 make the public policy determination, but not necessarily

24 always.

25 MR. STEWART: And it would depend upon the

48

1 authority entrusted to him --

2 QUESTION: Under the agreements --

3 MR. STEWART: -- by the parties.

4 And so the Department of Transportation

5 considered a provision that would have imposed a mandatory

6 60-day suspension for recidivists. It seemed clear to us

7 that if that provision had been adopted, the 90-day-plus

8 suspension that was imposed here couldn't be said to

9 violate public policy, and although it's not terribly

10 clear from the Federal Register notice exactly why the

11 Department declined to adopt that provision, it's very

12 clear that the Department understood that the consequence

13 of deleting that proposed rule was to leave to the

14 contracting parties the determination whether

15 reinstatement would occur even after a second positive

16 test. That is the public policy as determined by the

17 Department of Transportation.

18 If there are no further questions --

19 QUESTION: Does the record tell us where

20 Mr. Smith is working today, and at what job?

21 MR. STEWART: Not that I'm aware of.

22 QUESTION: Thank you, Mr. Stewart.

23 Mr. Roberts, you have 4 minutes left.

24

25

49

1 REBUTTAL ARGUMENT OF JOHN G. ROBERTS, JR.

2 ON BEHALF OF THE PETITIONER

3 MR. ROBERTS: Thank you, Your Honor. I have

4 just three very brief points.

5 First, the lower courts did not address the

6 questions we have been discussing this morning. They

7 adopted the position that because this award was not

8 illegal, the public policy exception does not apply. I

9 understand the Solicitor General's representative to agree

10 with us that that is an incorrect statement of the

11 standard. At the very least, then, it seems appropriate

12 to vacate the decision and send it back for the lower

13 courts to at least apply the correct standard.

14 Second, take no comfort in the certification of

15 the substance abuse professional. My brother for the

16 union said that he certifies that the employee

17 successfully completed rehabilitation. That is not

18 correct. All that the substance abuse professional

19 certifies is that the employee properly followed the

20 program, not that it worked, not that it was likely to

21 work, and certainly not that the employee does not present

22 a risk to the public, and also keep in mind that the

23 professional obligation of the SAP is to the employee, not

24 to the public safety. He could easily determine that it's

25 best for this employee to be back on the job, even if that

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1 represents a threat to public safety.

2 Finally, you can look through the regulations in

3 excruciating detail. You will not find a provision

4 addressing the problem of a recidivist. The Department

5 may have considered some things. It didn't adopt them.

6 It seems an awful lot of weight to place on the failure to

7 adopt a provision to conclude that someone who violates

8 these rules 20 times is to be treated exactly like someone

9 who violates it one time. That is insufficient to protect

10 public safety.

11 What the regulations provide is that this issue,

12 reinstatement, is left to contract. If it is left to

13 contract, the public policy exception applies.

14 In the reported cases alone, you will find

15 examples of arbitrators ordering the reinstatement of

16 nurses who prescribed the wrong medication and stood by

17 while patients were dying, the helmsman of a 635-foot oil

18 tanker who was on marijuana and ran it aground, the

19 nuclear plant operator who diffused the safety system at

20 the plant so he could leave early for lunch, and the pilot

21 of a 727 who flew it while blind drunk.

22 The public policy exception is needed for those

23 types of cases, and we respectfully submit that the case

24 of a driver of a 25-ton vehicle in West Virginia who has

25 twice failed drug tests fits in that category.

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1 Thank you, Your Honor.

2 CHIEF JUSTICE REHNQUIST: Thank you,

3 Mr. Roberts. The case is submitted.

4 (Whereupon, at 12:02 p.m., the case in the

5 above-entitled matter was submitted.)

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