A-Rod's Arbitration: A reminder for employers, in Iowa and elsewehere, about drug use in employment

On January 11, 2014, a three-arbitrator panel issued its opinion in a labor grievance filed by the Major League Baseball Players Association against the Office of the Commissioner of Baseball on behalf of its bargaining unit member, Alex Rodriguez (a/k/a 'A-Rod'). The grievance – like so many labor grievances filed over decades  contended that discipline imposed upon a worker (in this case, A-Rod) violated the collective bargaining agreement between the 30 Major League Clubs and the Major League Baseball Players Association, as well as Major League Baseball's Joint Drug Prevention and Treatment Program established by agreement of the Office of the Commissioner of Baseball and the players' association. The Major Leagues drug program essentially prohibits any player from using, possessing, or selling any drug of abuse, performing enhancing substance and/or stimulant and authorizes the Commissioner to impose disciplinary action for just cause on any player who violates the prohibitions. The collective bargaining agreement authorizes the Commissioner to discipline a player 'for just cause for conduct that is materially detrimental or materially prejudicial to the best interests of Baseball.' On August 5, 2013, Commissioner Allen H. ('Bud') Selig gave Rodriguez a written Notice of Discipline, stating that the discipline was issued for two reasons (1) violation of the drug program, because of A-Rod's 'intentional, continuous and prolonged use and possession' of prohibited substances, and (2) for violation of the collective bargaining agreement for A-Rod's attempts to cover up violations of the drug program 'by engaging in a course of conduct . . . that was intended to obstruct and frustrate the investigation' by the Commissioner's office of allegations of doping not only of Rodriguez but also of other players. Selig did not impose separate discipline for each violation. A-Rod grieved the discipline, which resulted in the arbitration hearing. The arbitration decision upheld the discipline and found clear and convincing evidence that A-Rod had indeed on multiple occasions violated the drug program, and clear and convincing evidence that he had indeed engaged in at least two different courses of conduct each of which was intended to either obstruct the investigation or cover-up his own violations. When the decision was first announced, various 'talking heads' had a multitude of comments about it, even though no one actually had a copy of it. This is typical in arbitration because, generally, arbitration is a private dispute resolution process. Unlike court proceedings, the public has no right to access documents in arbitration disputes. In fact, the A-Rod arbitration decision was marked 'CONFIDENTIAL' at the top of each page, and it also stated that all parties were required to maintain the confidentiality of player information and all proceedings before the arbitration panel. As one commentator noted:

Horowitz's [the neutral arbitrator's] opinion in the ruling wasn't released, and ultimately Rodriguez might want to keep it that way. If A-Rod sues to overturn [the neutral arbitrator's] decision, a source with knowledge of the hearing said, "The opinion would be made public and it's going to be devastating for everyone to see."

The arbitration decision did become public, however, when Rodriguez sued both his union (the Major League Baseball Players Association), and Major League Baseball/Office of the Commissioner in federal court to overturn it. As part of the lawsuit, A-Rod attached a copy of the 34 page arbitration opinion. Now, both the federal court complaint and the arbitration panel decision are available here and here among other sources. Employers have, for many years, been using agreements with individual employees under which they agree to submit disputes to the arbitration process. As the United States Supreme Court has repeatedly held, such agreements are subject to the Federal Arbitration Act, and are enforceable. The A-Rod arbitration, however, arose out of a private sector collective bargaining agreement, which is regulated by federal labor law. In 1960, the United States Supreme Court issued what has become known as the 'Steelworkers Trilogy,' which were three separate cases that answered various questions about the application of federal labor law regarding grievance arbitration. In one of those, United Steelworkers of America v. Enterprise Wheel and Car Corp.,  the Supreme Court established the standard to be applied in reviewing decisions of grievance arbitrators:

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.

When an arbitrator is commissioned to interpret and apply the collective bargaining agreement, he is to bring his informed judgment to bear in order to reach a fair solution of a problem. This is especially true when it comes to formulating remedies. There the need is for flexibility in meeting a wide variety of situations. The draftsmen may never have thought of what specific remedy should be awarded to meet a particular contingency. Nevertheless, an arbitrator is confined to interpretation and application of the collective bargaining agreement; he does not sit to dispense his own brand of industrial justice. He may of course look for guidance from many sources, yet his award is legitimate only so long as it draws its essence from the collective bargaining agreement. When the arbitrator's words manifest an infidelity to this obligation, courts have no choice but to refuse enforcement of the award.

In 1965 Judge William Hanson decided National Brotherhood Packing-House and Dairy Workers, Local No. 52 v. Western Iowa Pork, Inc., which was in turn affirmed in short order by the Eighth Circuit Court of Appeals, which followed Enterprise Wheel, and stated 'in making the determination of whether an arbitrator has exceeded his authority the agreement must be broadly construed with all doubts being resolved in favor of his authority.' This tough standard for review of arbitration decisions has been applied by federal courts here in Iowa for almost half a century. While A-Rod and his attorneys may be attempting to play to the larger court of public opinion, the decision in the lawsuit he filed will be made by a black-robed individual (or group of individuals) who will apply the substantive federal common law that has been around for more than a half-century. The bottom line is that, in either New York or Des Moines, the likelihood of overturning the decision of a collectively-bargained-for arbitration panel is extremely remote. For all Iowa employers, unionized or not, the arbitration decision teaches that an employer can prevail on a challenge to discipline when it is issued for the use of drugs, even in the absence of a positive drug test. The arbitration opinion is so chock-full of evidence of A-Rod's drug use that a caution should be provided: one should not read the opinion for guidance on how much evidence is needed to discipline for drug use because most cases will not require that much investigation or evidence gathering. But I agree with the tenor of the anonymous source who spoke to the media before the arbitration opinion became public when s/he said that the facts set out in the opinion, if not 'devastating for everyone,' are not something of which anyone can be proud.    

The material in this blog is not intended, nor should it be construed or relied upon, as legal advice. Please consult with an attorney if specific legal information is needed.

- Russ Samson