Altering Judicial Review of Labor Arbitration Awards

Abstract

This Article is primarily about whether the parties to a collective bargaining agreement can voluntarily agree to alter the standard of judicial review that any such labor arbitration decision would normally be subjected to. Under the FAA in the context of commercial arbitration, this issue has generated a significant amount of scholarly debate by academic commentators as well as a conflict in the circuits - with some courts even drawing a distinction between expanding judicial review and eliminating judicial review altogether. Significantly, however, with the exception of dicta contained in one Seventh Circuit opinion written by Judge Posner, the alteration of the standard of judicial review of labor arbitration awards in the private sector has not been addressed by scholarly commentators or by courts in the private sector.

The present state of the law does not provide any clear answer to the question whether the parties can contractually alter the standard of judicial review of a commercial arbitration decision. There is a tension between freedom of contract which lies at the heart of arbitration law and the need for judicial oversight in order to prevent abuse. The Supreme Court has denied certiorari four times where the issue has been raised in the context of a commercial arbitration. Given the amount of conflicting opinions that have been generated and the amount of scholarly debate, it is only a matter of time before the Supreme Court takes up this issue. It is submitted that regardless how the Supreme Court ultimately rules with respect to commercial arbitration under the FAA, an even more compelling case exists to allow parties to a collective bargaining agreement, which contains a labor arbitration provision, to alter the standard of judicial review. This is principally because labor arbitration is fundamentally different from commercial arbitration.

Keywords: labor arbitration, arbitration, alternative dispute resolution, labor law, collective bargaining, litigation

JEL Classification: K31, K41, J52, J53