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UNITED FOOD & COMMERCIAL WORKERS INTERNATIONAL UNION LOCAL 588 Plaintiff-Appellee
vs.
FOSTER POULTRY FARMS Defendant-Appellant.
 
Case:
No. 94-16152
 
Location:
UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT
 
Date:
December 18, 1995 Filed
 
Attorneys:
Marc A. Smyer Orrick Herrington & Sutcliffe San Francisco California for the defendant-appellant.
Donald C. Carroll Carroll & Scully San Francisco California for the plaintiff-appellee.
 
Court:
Before: Harry Pregerson Melvin Brunetti and Thomas G. Nelson
 
Author:
The Hon. Justice Harry Pregerson
 

Foster Poultry Farms ("Foster") appeals the district court's summary judgment confirming an arbitration award in favor of the United Food and Commercial Workers Union Local 588 UFCW AFL-CIO ("Union"). The arbitrator found that Foster had violated the collective bargaining agreement ("CBA") by unilaterally implementing a drug testing program for its drivers and by discharging two employees pursuant to the drug testing program. The arbitrator ordered reinstatement of the two employees and temporarily rescinded Foster's drug testing program until such time as Foster bargained with the Union over certain non-mandatory and discretionary aspects of Foster's drug testing program. Foster contends that the arbitration award violates the alleged public policy embodied in the regulations promulgated by the Federal Highway Administration of the Department of Transportation ("DOT") mandating various forms of drug testing for commercial motor vehicle operators. See 49 C.F.R. SEC.(S) 391.81-391.123. *fn1 We have jurisdiction under 28 U.S.C. SEC. 1291. The district court had jurisdiction under 28 U.S.C. SEC. 1331. We affirm. There are no grounds to vacate the arbitrator's award in this case.

BACKGROUND

Foster is an employer engaged in an industry affecting interstate commerce within the meaning of the National Labor Relations Act as amended 29 U.S.C. SEC.(S) 151 152(2) and (7). Effective February 18, 1991 Foster and the Union entered into a collective bargaining agreement covering wages hours and other conditions of employment. Section VII of the CBA contains a Grievance and Arbitration procedure whereby Foster and the Union agree to settle by arbitration any dispute as to the interpretation and application of the CBA.

A dispute arose between Foster and the Union over Foster's drug testing program. Without bargaining with the Union Foster unilaterally implemented a random drug testing program to comply with the DOT regulations mandating various forms of drug testing for commercial vehicle operators. See 49 C.F.R. SEC.(S) 391.81-391.123. *fn2

Under the DOT regulations an employer must conduct random annual drug testing of 50% of its drivers. 49 C.F.R. SEC. 391.109. The regulations provide in relevant part that any person who tests positive for drug use without being able to show "by clear and convincing evidence" that the "controlled substance" was medically prescribed shall be "medically unqualified" to operate a commercial motor vehicle. 49 C.F.R. SEC.(s) 391.95(b) and (c) 391.97. *fn3

The DOT regulations however do not require an employer to terminate an employee who tests positive for drug use. The regulations only prohibit an employee from driving a commercial motor vehicle. The DOT grants an employer broad discretion in how to deal with an employee who tests positive for drug use. The DOT contemplates that such issues as discipline and rehabilitation should be resolved by the labor negotiation process.

As the DOT explained when it issued its regulations:

It is understood that broad rehabilitation opportunities and job security for employees without regard to the manner of detection of drug use may help those drivers who are unable to help themselves. However the FHWA [Federal Highway Administration] believes that the comprehensive testing program of commercial motor vehicle drivers combined with an employee assistance program to educate and train all personnel is the most effective approach to promote safety and will reduce drug use in the motor carrier industry. . . . This rule [however] neither prohibits a motor carrier from assigning a driver to a non-driving duty nor requires the driver to use vacation time sick leave or leave without pay in order to accommodate that person's rehabilitation activities. Issues such as termination reassignment hiring of temporary drivers to fill a position or policies regarding a driver's absence are the FHWA believes issues that are appropriately the subject of labor-management negotiations and are not issues to be addressed in this rulemaking action.

53 Fed. R. 47 148 (November 21 1988) (emphasis added).

Foster terminated the first two employees who were randomly selected for drug testing. The first employee Brian Bowen tested positive for drug use. Bowen maintained that the chain of custody procedures were not properly followed in his case. The second employee Robert Folie refused to be tested. Folie incorrectly believed that Foster was required to provide 24-hour advance notice to employees selected for drug testing. Apparently Folie did not participate in the educational and training program required by the DOT regulations.

The Union challenged the employees' terminations and Foster's right to implement the drug testing program unilaterally through the collective bargaining grievance procedure. The Union maintained that the random drug testing program could not be implemented until such time as Foster agreed to bargain with the Union on the method by which the program would be carried out and the consequences to employees who test positive for drug use. The Union did not contest the reasonableness of the random drug testing program required by the DOT regulations.

Foster maintained that its random drug testing program was mandatory under the DOT regulations. Foster however agreed to arbitrate the issue of whether the unilateral implementation of the program and subsequent termination of its two employees violated the terms of the CBA. Foster did not agree to arbitrate any statutory issues.

At the arbitration hearing Foster argued that its actions in unilaterally implementing the drug testing program did not conflict with the CBA. According to Foster the CBA grants it the exclusive right to manage its business and direct its work force so long as Foster's actions do not conflict with the CBA.

The arbitrator rejected Foster's arguments. The arbitrator found that Foster had breached the CBA in failing to notify the Union of its intention to implement the drug testing program and in failing to bargain with the Union over the non-mandatory and discretionary elements of the drug testing program. As the arbitrator explained in her order:

Drug testing vitally affects employees' contractual rights to be discharged only for just cause. Accordingly under the clear language of the [labor] agreement the right to manage and direct does not privilege unilateral implementation of such a policy. . . . As a remedy the Employer must put the Union and Grievants where they would have been but for the contractual breach.

Having found that Foster had breached the CBA the arbitrator ordered Foster to reinstate the two employees and to rescind temporarily the drug testing program until such time as Foster bargained with the Union over such non-mandatory and discretionary aspects as discipline and rehabilitation. In justifying the appropriateness of these remedies the arbitrator noted:

[The] public policy as expressed in the DOT regulations prohibits operating a vehicle under the influence of drugs or alcohol. Those regulations express no public policy permanently enjoining the employment of persons who have ever used such substances. The public policy concern thus does not determine whether such persons should be reassigned to non-driving duties disciplined or discharged.

Thereafter the Union filed a complaint in the district court to confirm the labor arbitration award under 29 U.S.C. SEC. 185. Before the district court Foster sought to vacate the arbitrator's award. Foster alleged that the award violated public policy and was in manifest disregard of the law. The parties filed cross-motions for summary judgment. The district court granted summary judgment in favor of the Union and confirmed the arbitrator's award.

ANALYSIS

We review de novo the district court's grant of summary judgment. Jesinger v. Nevada Federal Credit Union 24 F.3d 1127 1130 (9th Cir. 1994). In this circuit because federal labor policy strongly favors the resolution of labor disputes through arbitration 'judicial scrutiny of an arbitrator's decision is extremely limited.' Stead Motors v. Automotive Machinists Lodge 886 F.2d 1200 1208 n.8 (9th Cir. 1989) (en banc) cert. denied 495 U.S. 946 109 L. Ed. 2d 531 110 S. Ct. 2205 (1990) (emphasis in original) (citations omitted). See also Federated Dept. Stores v. United Food & Commercial Workers Union Local 1442 901 F.2d 1494 1496 (9th Cir. 1990) ("The scope or review of an arbitrator's decision in a labor dispute is extremely narrow").

A court must limit its review "'to whether the arbitrator's solution can be rationally derived from some plausible theory of the general framework or intent of the agreement.'" Van Waters & Rogers Inc. v. Int'l Brotherhood of Teamsters 56 F.3d 1132 1135 (9th Cir. 1995) (quoting Desert Palace Inc. v. Local Joint Executive Bd. of Las Vegas 679 F.2d 789 (9th Cir. 1982)). An arbitration award must be confirmed "as long as the arbitrator is even arguably construing or applying the contract and acting within the scope of his authority." 56 F.3d at 1136 (quotations and citation omitted) (emphasis added). We are not empowered to second-guess the arbitrator's findings. 56 F.3d at 1135.

As we have explained:

The arbitrator's factual determinations and legal conclusions generally receive deferential review as long as they derive their essence from the [collective bargaining agreement]. If on its face the award represents a plausible interpretation of the contract judicial inquiry ceases and the award must be enforced. This remains so even if the basis for the arbitrator's decision is ambiguous and notwithstanding the erroneousness of any factual findings or legal conclusions.

Stead Motors 886 F.2d at 1209 (quoting Sheet Metal Workers Int'l Association v. Arizona Mechanical & Stainless Inc. 863 F.2d 647 653 (9th Cir. 1988)).

We however have recognized three narrow exceptions to the general rule of deferring to an arbitrator's decision:

(1) when the arbitrator's award does not "draw its essence from the collective bargaining agreement" and the arbitrator is dispensing "his own brand of industrial justice"; (2) when the arbitrator exceeds the boundaries of the issues submitted to him; and (3) when the award is contrary to public policy.

Federated 901 F.2d at 1496 (citations omitted). See also Stead 886 F.2d at 1205-1212.

Foster does not argue on appeal that the first two exceptions apply to this case; nor can the arbitration award be challenged on these grounds. There is no question here that Foster's unilateral implementation of the non-mandatory and discretionary aspects of the drug testing program and the subsequent termination of its two employees are proper subjects for arbitration. Foster's actions implicate conditions of employment and the collective bargaining agreement here provides that all labor disputes implicating the CBA must be settled through the grievance and arbitration procedures set forth in the contract.

Further both Foster and the Union agreed to arbitrate the issue of whether Foster's actions in unilaterally implementing the drug testing program and in subsequently terminating the two employees violated the CBA. Because the arbitrator only decided the issues agreed to by the parties it cannot be said that the arbitrator exceeded her authority in ordering the employees reinstated and in temporarily rescinding the drug testing program. And because the arbitrator relied solely on the CBA in finding that Foster had violated the CBA the arbitrator's award draws its essence from the agreement.

The only issue remaining on appeal therefore is whether the public policy exception applies to this case. Foster contends that the arbitrator's award violates the public policy embodied in the DOT regulations. The district court disagreed.

"The question of public policy is ultimately one for resolution by Court." United Paperworkers Int'l Union v. Misco Inc. 484 U.S. 29 43 98 L. Ed. 2d 286 108 S. Ct. 364 (1987) (citations and quotations omitted). "Courts should be reluctant to vacate arbitration awards on public policy grounds." Arizona Electric Power Cooperative Inc. v. Berkeley 59 F.3d 988 992 (9th Cir. 1995) (citing Misco 484 U.S. at 43 (there is no "broad judicial power to vacate arbitration awards as against public policy")). As we have explained:

The parties [to a collective bargaining agreement] did not bargain for a court's judgment. They bargained for an arbitrator to tell them what was "just cause" for discharge and what was not. In so doing they chose a method of resolving their differences and definitively interpreting their bargain. Each side obtained certain advantages from the arrangement. Neither had the right to believe that it could refuse to honor an arbitrator's award simply because it was disappointed by or disagreed with the result in a particular case.

Stead Motors 886 F.2d at 1217.

To vacate an arbitration award on public policy grounds we must (1) find that "an explicit well defined and dominant public policy" exists here and (2) that "the policy is one that specifically militates against the relief ordered by the arbitrator." Arizona Electric Power 59 F.3d at 992 (quoting Stead Motors 886 F.2d at 1212-1213). "General considerations of supposed public interest" do not trigger the public policy exception. Stead Motors 886 F.2d at 1210 (quotations and citations omitted). The party seeking to vacate the arbitration award bears the burden of showing that the arbitration award violates an "explicit dominant and well-defined" public policy. Id. at 1211.

Foster contends that the public policy embodied in the DOT regulations are sufficiently "well defined and dominant" to trigger the public policy exception. There is no question that the DOT regulations articulate a "well defined and dominant" public policy prohibiting employees who test positive for drug use from driving commercial motor vehicles.

The DOT regulations however do not express "an explicit well-defined and dominant" public policy permanently enjoining the employment of commercial motor vehicle drivers who test positive for drug use. The DOT regulations only prohibit employees who test positive for drug use from operating commercial motor vehicles; the DOT regulations do not require that such employees be automatically discharged.

Here the arbitrator ordered reinstatement of Bowen and Folie based on the fact that Foster had refused to bargain with the Union over the non-mandatory and discretionary aspects of its drug testing program. Because the DOT regulations do not make it illegal to reinstate employees who test positive for drug use it cannot be said that the DOT regulations "specifically militate[ ] against the relief ordered by the arbitrator" in this case. Stead Motors 886 F.2d at 1212-1213.

The DOT regulations also do not express a public policy prohibiting employers from bargaining with unions over non-mandatory and discretionary aspects of the drug testing program. Although implementing a random drug testing program is mandatory and failure to do so may subject an employer to various penalties *fn4 there is no indication in the relevant statutes the legislative history or the regulations themselves that the drug testing requirements were intended to preempt already existing collective bargaining agreements or to eliminate an employer's duty to bargain under federal labor laws.

In fact the DOT expected employers to bargain in good faith with employees and their unions over the non-mandatory aspects of the drug testing regulations which DOT left to the employer's discretion. See 53 Fed. Reg. 47 148 (November 21 1988). As the DOT explained when issuing the regulations issues such as termination, reassignment, hiring of temporary drivers to fill a position or policies regarding a driver's absence from a position are, the FWHA believes, issues that appropriately are the subject of labor-management negotiations and are not issues to be addressed in this rulemaking action. Id. (emphasis added).

In these circumstances the arbitrator's award requiring Foster to reinstate the two discharged employees and to bargain over such matters as discipline reassignment and rehabilitation does not violate the public policy embodied in the DOT regulations. Because the arbitrator's award is consistent with the DOT regulations the public policy exception does not apply in this case.

CONCLUSION

As set forth above there are no grounds to vacate the arbitrator's award in this case. We AFFIRM the district court's summary judgment confirming an arbitration award in favor of the Union.

AFFIRMED.

ORDER

The opinion filed December 18, 1995 is amended as follows:

Slip opinion page 15668 footnote 1 line 2 section 5(a) should be changed to "section 12005(a)" and line 5 SEC. 2705 should be changed to " SEC. 2505."

Slip opinion page 15669 footnote 3 line 2 the word "not" should be deleted.

The second and third full paragraphs on slip opinion page 15676 should be deleted and replaced with the following two paragraphs:

The DOT regulations however do not express "an explicit well-defined and dominant" public policy permanently enjoining the employment of commercial motor vehicle drivers who test positive for drug use. The DOT regulations only prohibit employees who test positive for drug use from operating commercial motor vehicles; the DOT regulations do not require that such employees be automatically discharged.

Here the arbitrator ordered reinstatement of Bowen and Folie based on the fact that Foster had refused to bargain with the Union over the non-mandatory and discretionary aspects of its drug testing program. Because the DOT regulations do not make it illegal to reinstate employees who test positive for drug use it cannot be said that the DOT regulations "specifically militate[ ] against the relief ordered by the arbitrator" in this case. Stead Motors 886 F.2d at 1212-1213.

With these amendments both parties' petitions for rehearing are denied. - - - -

 
Notes:

*fn1 The DOT promulgated the regulations pursuant to its authority under section 12005(a) of the Commercial Motor Vehicle Safety Act of 1986 49 App. U.S.C.A. SEC. 2505(a) Pub. L. 99-570 100 Stat. 3207-171 (October 27, 1986). The 1986 Act supplemented the Motor Carrier Safety Act of 1984 49 App. U.S.C. SEC. 2505 Pub. L. 98-554 Title II SEC. 206 98 Stat. 2834 (October 30, 1984). The 1986 Act in turn was supplemented by Title V of the Omnibus Transportation Employee Testing Act of 1991 49 App. U.S.C. SEC. 2717(a) Pub. L. 102-143 Title V SEC. 5(a) 105 Stat. 952 959 (October 28, 1991). These statutes were repealed by Pub. L. 103-272 SEC. 7(b) 108 Stat. 1379 (July 5, 1994) and replaced by 49 U.S.C.A. SEC.(s) 31136 and 31306.

*fn2 These regulations were upheld by this court as constitutional. Int'l Bhd. of Teamsters v. Department of Transportation 932 F.2d 1292 (9th Cir. 1991).

*fn3 A person who refuses to be tested is deemed to test positive for drug use and cannot be permitted to operate a commercial motor vehicle. 49 C.F.R. SEC. 391.95(d).

*fn4 See 49 U.S.C. SEC. 521.