American Postal Workers Union Afl-Cio v. United States Postal Service, San Francisco Bulk Mail Center, Richmond, California

682 F.2d 1280, 110 L.R.R.M. (BNA) 2764, 1982 U.S. App. LEXIS 18615

• Court: Court of Appeals for the Ninth Circuit
• Decided: June 8, 1982
• Docket: 80-4250
• Status: Published

Opinions

WALLACE, Circuit Judge:

The American Postal Workers Union (the union) appeals from a district court judgment denying enforcement of an arbitration order. The district court determined that the arbitration order compelled the United States Postal Service (Postal Service) to perform an illegal act and was therefore unenforceable. We affirm.

I

The union brought this action on behalf of Michael Murphy (Murphy), a union member discharged by the Postal Service for participation in an illegal work stoppage. The incidents which gave rise to this action are not disputed. On Friday evening, July 21,1978, Murphy was informed that a strike would be initiated at the bulk mail facility the following morning. The next day, Murphy arrived at the facility to investigate the situation a little over an hour before his 9:00 a.m. shift began. He observed a group with picket signs gathering and moving towards the facility’s main entrance. He recognized some members of the group as coworkers and others as union officers. When he inquired about the activities, he was informed that a picket line would be established, but that no one would be prevented from crossing it. Murphy, nevertheless, anticipated that there would be threats and verbal abuse directed toward workers who crossed the line and concluded that he would not attempt to enter the facility.

He drove to a public telephone, called the bulk mail facility, and stated that he would not report for duty as he was afraid to cross the picket line. He then returned to the main gate and commenced picketing. Murphy testified before the arbitrator that he had two reasons for joining the picketers: “I felt safer by not crossing the line. And secondly, I was one of them because I was in their union, worked with them.” Murphy engaged in the picketing activities until 10:30 or 11:00 a.m. He then left the facility and did not return until the afternoon. Upon his return he learned that the strike was not union sanctioned. Because of this, Murphy decided that he would not offer further direct support.

On each of the three following days, Murphy arrived at the facility prior to the start of his scheduled shift. When, on each day, he encountered picketers, he called in to report that he was unwilling to cross the line. He then returned home without taking part in the picketing activities.

On July 27 Murphy received formal notice of his termination. Murphy testified before the arbitrator that he had observed letters distributed by the Postal Service notifying postal employees that strikes were prohibited by law. The arbitrator found that Murphy was not discharged for just cause and ordered his reinstatement with no loss of seniority rights but without back pay.

The union filed a complaint to confirm the arbitration award and secured an order to show cause why the award should not be confirmed. After a hearing, enforcement was denied and the complaint was dismissed with prejudice.

This appeal presents two questions: (1) whether the arbitrator’s decision required the Postal Service to perform an illegal act, and (2) if so, whether the award is enforceable. We address the question of legality first.

II

The arbitrator’s award requires the Postal Service to reinstate Murphy. By statute, a worker may not hold a government position if the individual has participated in a strike against the government. 5 U.S.C. § 7311.¹ Appropriately, the union has not challenged the right of the government to establish such conditions of hiring and retention of employees. See United Federation of Postal Clerks v. Blount, 325 F.Supp. 879, 882-84 (D.C.D.C.), aff’d, 404 U.S. 802, 92 S.Ct. 80, 30 L.Ed.2d 38 (1971). If Murphy engaged in a strike against the Postal Service, reinstatement would violate 5 U.S.C. § 7311 and thus be illegal. We must therefore determine whether Murphy did or did not strike.

The facts of this case are undisputed. Therefore, we need not decide what deference should be given to the arbitrator’s findings of fact. It is clear that the arbitrator accepted as true Murphy’s uncontroverted testimony of his involvement in the strike, including his uncoerced picketing activities. The arbitrator’s conclusions, however, are less than precise. The arbitrator specifically determined that Murphy “abandoned the strike and took no further part in proscribed activities” after he learned that the strike was not sanctioned by the union. Additionally, the arbitrator stated that Murphy gave “active, but misconceived, support of the strike.” The only logical inference which can be drawn from this language is that the arbitrator concluded that Murphy took some part in “proscribed activities” and that he participated in the strike prior to abandoning it. It is not necessary for an arbitrator to state the precise words that an employee “participates in a strike” in order to conclude that his employment would violate section 7311. The language used is sufficient.

Nevertheless, the arbitrator awarded Murphy reinstatement. An award of reinstatement seems inconsistent with the conclusion that Murphy participated in the strike. The arbitrator explained the award, however, as a mitigated penalty:

Grievant’s assertions that he acted under erroneous assumptions and that he subsequently abandoned the strike are convincing. The penalty of discharge is too severe in view of Grievant’s potential for becoming a valuable Postal Service employee, and particularly in view of the destructive effect that sustaining the discharge would in all likelihood have upon his prospects for future employment. Given the mitigating circumstances present here, the Arbitrator is neither constrained nor persuaded to uphold termination.

In light of these statements and upon examination of the entire opinion of the arbitrator, we conclude that the award of reinstatement does not reflect any doubt in the arbitrator’s mind as to whether Murphy participated in a strike. Rather, the award demonstrates the arbitrator’s belief that the penalty was too severe and should be reduced. The specific award, reinstatement without back pay, supports our conclusion. We can conceive of no reason for which the arbitrator would have penalized Murphy had he not participated in the strike.

But even if the arbitrator’s conclusions were not clear, a remand would not be appropriate in this case. Reversing the district court and remanding to the arbitrator would be futile unless, upon remand, the arbitrator could decide that Murphy did not participate in the strike and unless, if he so found, we would be required to defer to his conclusion. We hold that even if the arbitrator’s conclusions were unclear and if, upon remand, he decided that Murphy did not participate in a strike, we could not defer to such a determination.

In most cases, courts must defer to an arbitrator’s conclusions even where they are erroneous. E.g., San Martine Compania de Navegacion v. Saguenay Terminals Limited, 293 F.2d 796, 801-02 (9th Cir. 1961) (San Martine). These cases involve conclusions of law with respect to such issues as contract interpretation, id. (cancellation provision and course of dealings pursuant thereto), and damages for breach, MSP Collaborative Developers v. Fidelity and Deposit Company of Maryland, 596 F.2d 247, 251-52 (7th Cir. 1969). When the cases and issues are of this nature, the arbitrator’s conclusions simply resolve the competing interests of two opposing private parties, and courts are bound to defer to the conclusions of the arbitrator unless the arbitrator has manifestly disregarded the law.

We believe that a conclusion that Murphy did not strike would constitute manifest disregard of the law. See Wilko v. Swan, 346 U.S. 427, 436-37, 74 S.Ct. 182, 187-88, 98 L.Ed. 168 (1953); Sobel v. Hertz, Warner & Co., 469 F.2d 1211, 1214 (2d Cir. 1972); San Martine, supra, 293 F.2d at 801. See also Trafalgar Shipping Co. v. International Milling Co., 401 F.2d 568, 572-73 (2d Cir. 1968). The facts show that Murphy understood that the picketers were on strike. While he believed the strike to be union sanctioned when, in fact, it was not, he still understood that the activity was a strike. He did not simply refuse to cross the picket line out of fear; he joined the picketers. While his participation in the picketing was short-lived, it was not nonexistent. Murphy’s picketing with co-workers during scheduled work hours constituted a concerted work stoppage and a strike under 5 U.S.C. § 7311. See United Federation of Postal Clerks v. Blount, supra, 325 F.Supp. at 884-85; Tennessee Valley Authority v. Local No. 110 of Sheet Metal Workers Int’l Ass’n, 233 F.Supp. 997, 1000 (W.D.Ky.1962). We have found no authority to suggest that Congress intended the statute to cover only strikes where the striker correctly ascertains the strike leadership, only strikes which involve something more than picketing and concerted work stoppage, or only strikes of a certain duration. We therefore conclude that, should the arbitrator decide that Murphy did not participate in a strike, he would do so in manifest disregard of the law. In that case, the arbitrator’s conclusions would not be entitled to the deference ordinarily accorded and would not bind this court. See San Martine, supra, 293 F.2d at 801.

Furthermore, even if the error would not be so clearly contrary to the law as to constitute manifest disregard of the law, we could not defer to a conclusion by the arbitrator that Murphy did not strike and should be reinstated. This case requires more than the resolution of the competing interests of two opposing private parties. It also requires an adjudication of the coverage and application of a federal law passed by Congress to insure a stable work force for the government and agencies of the United States. We therefore cannot treat the issues raised by this dispute merely as matters of conflict between an employer and its employees. In light of the undisputed facts of this case, we could not confirm an award of arbitration simply because the arbitrator stated that Murphy did not strike. To confirm such an award in this case would be to confer upon the arbitrator unreviewable power to construe and apply section 7311. In his original decision, the arbitrator concluded that the penalty of discharge was too severe a sanction because Murphy was young, misinformed, and potentially valuable as an employee. The choice of sanctions, however, is not arbitrable; that choice has already been made by Congress. We cannot empower the arbitrator to nullify the mandates of Congress simply by stating that an individual did not strike when, as here, his actions, as presented in undisputed facts, constitute a strike for purposes of the section.

The union also argues that we should review the arbitrator’s decision only by reference to an October, 1979, letter award and that we should disregard the December formal award and its accompanying opinion. The letter award merely stated that Murphy was dismissed without cause, reinstatement was required, and a full opinion would follow. In effect, the union argues that we should disregard what the arbitrator said about what happened in this case, i.e., his findings with respect to Murphy’s activities. We reject the union’s argument. Although an arbitrator is not required to make formalized findings nor to offer reasons for his decisions, when he does so, we need not ignore them. See United Steelworkers of America v. Enterprise Wheel & Car Corp., 363 U.S. 593, 597, 80 S.Ct. 1358, 1361, 4 L.Ed.2d 1424 (1960).

We conclude that Murphy participated in a strike against the Postal Service. His reinstatement would violate 5 U.S.C. § 7311. That is the only conclusion which the facts of this case can support. In light of these facts, remand would be futile because, for reasons given above, we could not accord judicial deference to any other conclusion by the arbitrator. We therefore turn to the question of enforceability.

Ill

Federal courts will not undertake plenary review of the merits of an arbitration award. “The refusal of courts to review the merits of an arbitration award is the proper approach to arbitration under collective bargaining agreements. The federal policy of settling labor disputes by arbitration would be undermined if courts had the final say on the merits of the awards.” United Steelworkers of America v. Enterprise Wheel & Car Corp., supra, 363 U.S. at 596, 80 S.Ct. at 1360. Review of arbitration awards is more limited than review of trial court decisions. An arbitrator’s award will not be vacated because of erroneous findings of fact or misinterpretations of law. Orion Shipping & Trading Co. v. Eastern States Petroleum Corp. of Panama, 206 F.Supp. 777 (S.D.N.Y.1962), aff’d, 312 F.2d 299 (2d Cir.), cert. denied, 373 U.S. 949, 83 S.Ct. 1679, 10 L.Ed.2d 705 (1963). See also United Steelworkers of America v. Enterprise Wheel & Car Corp., supra, 363 U.S. at 598-99, 80 S.Ct. at 1361-62. Where the parties have bargained for an arbitrator’s construction of their contract, a court will not overrule the arbitrator simply because its interpretation of the contract differs from his. Thus, a court enforces the contract of the parties who have agreed to abide by the arbitrator’s decision.

Nevertheless, the purpose of federal arbitration law is “to make arbitration agreements as enforceable as other contracts, but not more so.” Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 404 n.12, 87 S.Ct. 1801, 1806 n.12, 18 L.Ed.2d 1270 (1967). “It is no less true in suits brought ... to enforce arbitration awards than in other lawsuits that the ‘power of the federal courts to enforce the terms of private agreements is at all times exercised subject to the restrictions and limitations of the public policy of the United States.’ ” Local 453, International Union of Electrical, Radio & Machine Workers v. Otis Elevator Co., 314 F.2d 25, 29 (2d Cir.), cert. denied, 373 U.S. 949, 83 S.Ct. 1680, 10 L.Ed.2d 705 (1963), quoting Hurd v. Hodge, 334 U.S. 24, 34-35, 68 S.Ct. 847, 852-853, 92 L.Ed. 1187 (1948).

It is a general principle of contract law that courts will not enforce contracts requiring the performance of an illegal act. Northwest Airlines, Inc. v. Alaska Airlines, Inc., 351 F.2d 253, 256 (9th Cir. 1965); Naseef v. Cord, Inc., 90 N.J.Super. 135, 142, 216 A.2d 413, 417, aff'd, 48 N.J. 317, 225 A.2d 343 (1966). This principle applies to all kinds of contracts, including contracts under which parties agree to submit their grievances to arbitration and to abide by arbitrators’ decisions. See Amalgamated Transit Union v. Aztec Bus Lines, 654 F.2d 642 (9th Cir. 1981) (arbitration award requiring a party to violate the law is against public policy and cannot be enforced); Glendale Manufacturing Co. v. Local No. 520, International Ladies’ Garment Workers’ Union, 283 F.2d 936 (4th Cir. 1960), cert. denied, 366 U.S. 950, 81 S.Ct. 1902, 6 L.Ed.2d 1243 (1961) (employer cannot be forced to comply with an arbitration award requiring the commission of an unfair labor practice). See also Minkoff v. Scranton Frocks, Inc., 181 F.Supp. 542, 547 (S.D.N.Y.), aff’d, 279 F.2d 115 (1960); Rushton v. Howard Sober, Inc., 198 F.Supp. 337, 345 (W.D.Mich.1961). We therefore conclude that the courts cannot enforce an arbitrator’s award if it requires the performance of an illegal act.

We have determined that reinstatement of Murphy by the Postal Service would violate 5 U.S.C. § 7311. The district judge properly denied enforcement of the arbitrator’s award and properly dismissed with prejudice the complaint to confirm the arbitration award.

AFFIRMED.

1 . 15 U.S.C. § 7311 provides, in part:

An individual may not accept or hold a position in the Government of the United States ... if he—

(3) participates in a strike .. . against the Government of the United States ....

18 U.S.C. § 1918 establishes criminal penalties for the violation of section 7311.