Public policy exception we have not previously

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PUBLIC POLICY EXCEPTION We have not previously addressed whether an arbitration award, under the Uniform Arbitration Act, can be vacated by a court on public policy grounds. The State Patrol argues that we should adopt such a doctrine, using the reasoning of the U.S. Supreme Court in cases such as W.R. Grace & Co.; Misco, Inc.; and Eastern Associated Coal Corp. v. Mine Workers. In W.R. Grace & Co., an arbitrator found that an employer had unlawfully laid off employees in violation of a collective bargaining agreement, despite the fact that the employer had been attempting to comply with a conciliation agreement with the Equal Employment Opportunity Commission. The employer sought to vacate the arbitrator’s award on the ground that it violated public policy. Although the U.S. Supreme Court rejected the claim that the arbitrator’s interpretation of the collective bargaining agreement violated public policy, the Court recognized: [A] court may not enforce a collective-bargaining agreement that is contrary to public policy .... If the contract as interpreted by [the arbitrator] violates some explicit public policy, we are obliged to refrain from enforcing it. ... Such a public policy, however, must be well defined and dominant, and is to be ascertained “by reference to the laws and legal precedents and not from general considerations of supposed public interests.” The Court extended that reasoning in Misco, Inc., in which a machine operator had been fired after marijuana was found in his home and in his vehicle parked in his employer's parking lot. An
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Spring 2017 LER 590-E: GOVERNMENT REGULATION II 40 | P a g e arbitrator ordered the employee reinstated with backpay, reasoning that the evidence did not establish that he had used or possessed marijuana on company property, in violation of company policy. The federal district court declined to enforce the award, and the Fifth Circuit affirmed the district court’s conclusion that “reinstatement would violate the public policy ‘against the operation of dangerous machinery by persons under the influence of drugs or alcohol.’” The Court explained that “[a] court’s refusal to enforce an arbitrator’s award under a collective- bargaining agreement because it is contrary to public policy is a specific application of the more general doctrine, rooted in the common law, that a court may refuse to enforce contracts that violate law or public policy.” That doctrine derives from the basic notion that no court will lend its aid to one who founds a cause of action upon an immoral or illegal act, and the doctrine is further justified by the observation that the public’s interests in confining the scope of private agreements to which it is not a party will go unrepresented unless the judiciary takes account of those interests when it considers whether to enforce such agreements. In the common law of contracts, this doctrine has served as the foundation for occasional exercises of judicial power to abrogate private agreements.
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