Steelworkers Trilogy Cases: Their Impact

Steelworkers Trilogy Cases: Their Impact on Arbitration

The steelworkers trilogy cases greatly changed the way that arbitration is dealt with in this country. Because of this it is important to discuss and analyze these three cases and determine what arbitration was like before and after the cases took place. This study looks at arbitration in various cases (most notably the steelworkers trilogy) based on unfair labor practices. There is significance to this based on the fact that the way that arbitration is conducted was changed based on these cases and they made a significant difference in the way that the laws regarding arbitration were handled.

Looked at here will be the steelworkers trilogy cases, the history of arbitration both before and after the cases, and the impact that these cases had on arbitration in this country. while there were undoubtedly many other cases that also had an impact on arbitration law, the steelworkers trilogy had the strongest impact and caused the most sweeping changes to be made within this particular area of law.

The Steelworkers Trilogy Cases: Their Impact on Arbitration

Introduction

There are several ways that parties to a labor dispute can resolve their grievances. One of the ways that is rapidly growing in popularity is arbitration. This is where the two parties get together to state and discuss their grievances before a neutral third party. They then agree to be bound by whatever that third party decides. While this seems to be a good and logical way of resolving differences, arbitration has not always been widely accepted and many people believe that there is not really enough neutrality to make arbitration work. It has also been argued that arbitration should not really be binding, since there is no court of law involved in the final decision that is made.

Despite this concern, however, the United States Supreme Court has indicated its belief that arbitration should be binding. The Court dealt with the importance of arbitration to the national labor policy and also worked to limit the power that courts have to interpret what is stated in collective bargaining agreements, thus allowing for arbitration to be more solid and respected. Many standards have been set by the Supreme Court to help stop lower courts from intervening when it comes to the decisions made for arbitration awards. However, there is a problem with this issue in that many of the standards that were set by the Court lack a certain degree of precision and this allows for the lower courts to reject some arbitration awards if they feel that the circumstances surrounding them were questionable. According to Professor Mack Berger, courts know that they should support the process of labor arbitration, but they also want to ensure that there is not total judicial oversight when it comes to the issue.

Arbitration Before the Steelworkers Trilogy Cases

The history of arbitration should be discussed (briefly) before the steelworkers trilogy cases, to give a clearer understanding of exactly what the cases did for this particular field of law. Overall, arbitration is used to settle disputes between people, businesses, and countries. For purposes of this discussion, however, only the arbitration that is related to labor organizations will be dealt with. Labor arbitration goes all of the way back to 1926 and the Railway Labor Act. This Act was also amended in 1936 to include the airline industry, and it is the Act that is still used today to dictate the process used for solving labor disputes within various industries, including steelwork.

Originally, it was created to ensure that the infrastructure of the railway and air industries remained intact, and also was the first piece of legislation that actually recognized the labor unions and granted them power over collective bargaining. There was a price for this, however, as the Act also prohibited any labor unions from compromising the nation's infrastructure or striking without a sanction from the government. This can cause problems for unions and workers that cannot seem to resolve their differences, and if the workers strike anyway they can be in violation of the Act and face penalties. Arbitration was designed to keep this from happening and give the labor unions a chance to work out their differences without involving the courts.

When the Act gave the labor unions collective bargaining power, it also created for them a process for formal dispute resolution. Arbitration is the final step within that process. It is used when the company and the union are completely unable to resolve their differences and settle a dispute on their own, but usually the company and union can settle their differences before arbitration is necessary. The steelworkers trilogy cases helped to ensure that arbitration was fair for all parties involved and that changes were made to the arbitration process that made it better for the future as well.

The Steelworker Trilogy Cases

The steelworkers trilogy cases of 1960 gained much attention at the time and remained famous for years afterward as being the most significant cases where the arbitration of grievances were concerned. In these cases, the United States Supreme Court was aware of the necessity of strict rules to keep arbitration honest and fair for all of the parties that are involved with it. One of the laws under which arbitration awards may be forced or vacated is Section 301 of the Labor Management Relations Act, which has been used for some time in various cases. The Federal Arbitration Act also created guidelines to ensure that arbitration is fair, and there are only four circumstances under Federal law where an arbitration award may be changed or vacated under this Act. These include:

When the award was created as a result of corruption, undue means, or fraud.

When partiality or corruption was evident on the part of the arbitrators.

When the arbitrators are found to be guilty of misconduct because they did not postpone the hearing even with a show of sufficient cause or refused to hear evidence that was material and pertinent to the case, or showed any other misconduct that violated the rights of either party to the arbitration.

When the arbitrators clearly exceeded the powers that they have or executed them so imperfectly that a definite, final, and mutual award was not actually made regarding the subject matter that was being considered.

Those that choose arbitration must be careful as well that the challenges or charges that they bring are realistic and have merit. If they do not, there can be sanctions imposed on them for the frivolous challenge to the arbitration award, or if the court must enforce a legitimate arbitration award. Overall, attorney's fees are usually what the court orders in these types of cases, but they could request other awards as well.

Case #1 - United Steelworkers of America v. American Manufacturing Co.

In this particular case, an employee, Mr. Sparks, brought an action against his employer stating that he was barred from arbitration on a particular claim. Mr. Sparks had been 25% permanently partially disabled in an accident that occurred at work, had filed for a worker's compensation claim, and the claim had been settled in a satisfactory manner. After all of this had transpired, the union that Sparks belonged to filed a grievance with the company on the grounds that Sparks should be allowed to return to his job. This was based on a seniority clause in the collective bargaining agreement. The company refused arbitration in the matter and therefore it went to court.

At the District Court level, it was decided that Sparks was not allowed to make a claim for seniority because he had accepted the terms of the settlement for the injury that he sustained. The Appeals Court used different reasoning, but it affirmed the decision of the District Court. When the case arrived at the Supreme Court through a writ of certiorari, the decision was reversed and the union that Sparks belonged to was allowed to go ahead with its claim that he should be able to return to work due to seniority. Evidence suggests that the refusal of the company to go to arbitration when this was an established policy might have had something to do with the decision that was made, since the refusal to go to arbitration violated the specific provisions that were set out in the contract between the company and the union to which Sparks belonged.

Another reason that the Court likely found that Sparks and the union could go ahead with the claim was that it was believed that the District Court lacked the jurisdiction that it needed to make a determination regarding the merits of the claim, since the parties had originally agreed to submit to a Board of Arbitrators for a decision. The Court therefore had to deal with a request that was asking that the standard form of arbitration be enforced.

Case #2 - United Steelworkers of America v. Enterprise Wheel & Car Corp.

In the Enterprise case, there were employees that were fired from their jobs during the time that a collective bargaining agreement was in place. That bargaining agreement did contain a clause for arbitration of disputes, and these disputes included having differences regarding the meaning and application of the agreement, as well as a provision that required back pay and reinstatement for employees that were fired or otherwise let go if the company was in any way in violation of that agreement by ending the employment of these individuals.

This is by far the most groundbreaking and fascinating case of the steelworkers trilogy, largely because it looks at an arbitration that did take place and the subsequent refusal of the company to comply with the award that was determined during arbitration. The individuals that had been terminated from the company went to arbitration to have their cases heard after the collective bargaining agreement had expired, but had been terminated during the time that it was still in force. During the arbitration, the arbitrator found that the company was in violation of the collective bargaining agreement that it had with these individuals and that pursuant to the terms of the agreement the individuals that had been discharged must be reinstated and given back pay. The only thing the employees would lose from this back pay would be pay for a ten-day suspension and any money that the employees had received from any other employment they had taken after their discharge.

The company refused to comply with the arbitration award and the District Court got involved and required that the company comply. The Appeals Court, however, held that the award was unenforceable because the amounts that would had to have been deducted from the back pay were not specified, however that could be easily remedied by requiring all of the parties to complete the arbitration. The appeals court also held that providing any type of award for back pay past the expiration date of the collective bargaining agreement was unenforceable and therefore the reinstatement of the terminated employees was also unenforceable based on the fact that that agreement had expired. When this case reach the Supreme Court, that Court held that the District Court's judgment should have been affirmed by the Appeals Court with a slight modification that required the specific amounts that were due to the terminated employees be determined definitely through arbitration.

This was a clear indication that the Supreme Court believed the Appeals Court had overstepped its boundaries and therefore found that the individuals that were terminated while the collective bargaining agreement was still in place did indeed deserve to have a reinstatement and back pay minus any pay that they received from other sources of employment after they were discharged from the company. This was a significant step for arbitration because it allowed arbitrators to realize that the Supreme Court was basically behind them when it came to determination of arbitration agreements and what type of awards these wrongly treated employees should receive.

Case #3 - United Steelworkers of America v. Warrior & Gulf Navigation Co.

In the Warrior case, the main question was essentially the same as that in the American case (Case #1 here). The issue at hand is whether the company had agreed to arbitration regarding a particular grievance or type of grievance, but the difference is that the Warrior case dealt with the provision that arbitration would not be agreed upon in matters which were considered to be strictly a function of the management of the company. In the case of Warrior, the promise for arbitration was different and therefore the scope of inquiry taken by the Court was also different. In this case, the Court had to examine the substantive provisions that were found within the contract in order to determine whether the parties to that contract provided that contracting out should be a management function.

In this case, the Court determined that there was inconclusive evidence and that there was a very broad arbitration clause and a very vague exclusion clause. Due to this, Warrior was not limited by covenants of good faith and could contract out however and whenever it pleased. By being able to do this, Warrior could destroy the collective bargaining agreement completely - all it had to do was to contract out all of the work. Whether this is fair to the union and the collective bargaining agreement is cause for concern, but the Court only looked at the issue of law, as they should. Because the arbitration clause was rather vague, Warrior was able to get around what the union felt that the company should do and therefore did not suffer any punishment for the alleged refusal to arbitrate a grievance.

Conclusion

As can be seen from the three cases presented above, arbitration has changed a great deal. The steelworkers trilogy cases are some of the most influential and groundbreaking cases when it comes to decisions made by arbitrators and changes made to collective bargaining agreements in order to ensure that the language of them was clear and that arbitration was utilized when and where it was appropriate. Arbitration is a very good way to solve many complex problems, whether between business individuals or between individuals having concerns regarding a personal issue.

Despite this, however, arbitration is not perfect and occasionally mistakes are made. This is the main reason that the courts sometimes have to get involved in arbitration issues. Many times, the courts must get involved in this type of issue because the language regarding arbitration in the collective bargaining agreement is not as clear as it should be. The steelworkers trilogy cases helped to make collective bargaining agreements more clear and helped companies and unions to ensure that they had everything down in writing when they entered into collective bargaining agreements, especially where arbitration and other grievance procedures were concerned. Not only did this have significance for unions and their members, but it also had a lot of significance for companies, as these companies learned how careful they must be in the wording of agreements they enter into with unions in the future in order to avoid court battles and other expensive problems.

The nature of arbitration would likely have changed to some extent regardless of whether the steelworkers cases ever went to court and regardless of how they ended up. However, arbitration changed more rapidly because of these cases and because of the outcome. In general, the courts ruled in favor of the employees or the unions. While this was not always the case, such as in the case of Warrior, there was an overwhelming tendency to find that the employees or the unions had acted in good faith with the complaints that they had raised and had attempted to take the steps that were indicated in the collective bargaining agreement toward arbitration. In essence, it was not the fault of these individuals that the companies refused arbitration or refused to pay the award that they were asked to pay when arbitration was completed.