SW Legal studies in Business

Courts Can Overturn Labor Arbitrator's Decision in Rare Instances
Description The Supreme Court, reversing an appeals court, held that the decision of a labor arbitrator is to stand if errors were made, unless the arbitrator commits a serious error. In such instances, the courts should not resolve the case on its merits, but return the matter for further arbitration proceedings.

Topic Labor Law
Key Words Arbitration; Reversal
C A S E   S U M M A R Y
Facts Former Major League Baseball player Steve Garvey filed a claim for $3 million compensation from a $280 million dollar fund established by team owners to compensate players for income lost due to collusion among team owners in the late-1980s. Since the fund was under the collective bargaining agreement between the players and the owners, and the allocation of the money was subject to labor arbitration, the proceedings were subject to the Labor Management Relations Act. The arbitrator rejected the evidence presented by Garvey and awarded him nothing. Garvey appealed to the courts. The court of appeals reversed the decision of the arbitrator and ordered Garvey be awarded $3 million. The players association appealed to the Supreme Court.
Decision Reversed. "Judicial review of a labor-arbitration decision pursuant to such an agreement is very limited. Courts are not authorized to review the arbitrator's decision on the merits despite allegations that the decision rests on factual errors or misinterprets the parties' agreement.... It is only when the arbitrator strays from interpretation and application of the agreement and effectively 'dispenses his own brand of industrial justice' that his decision may be unenforceable. When an arbitrator resolves disputes regarding the application of a contract, and no dishonesty is alleged, the arbitrator's 'improvident, even silly, factfinding' does not provide a basis for a reviewing court to refuse to enforce the award." The court erred when it directed the judgment in favor of Garvey and overruled the arbitrator.
Citation Major League Baseball Players Association v. Garvey, 121 S.Ct. 1724 (Sup. Ct., 2001)

Back to Labor Law Listings

©1997-2002  SW Legal Studies in Business. All Rights Reserved.