High Court Says Arbitration Order Binding

The U.S. Supreme Court on Tuesday said companies generally must comply with arbitration orders not to fire potentially dangerous workers, requiring a coal company to reinstate a truck driver who used marijuana.

The court unanimously rejected calls to void the reinstatement on grounds it would violate public policy by creating a safety hazard. Clearing up lower court disagreement, the justices said arbitration rulings are binding except in rare circumstances--such as an order requiring an illegal act.

“We recognize that reasonable people can differ as to whether reinstatement or discharge is the more appropriate remedy here,” Justice Stephen G. Breyer wrote for the court. “But both employer and union have agreed to trust this remedial decision to an arbitrator.”

The ruling could cut the power of companies to fire workers accused of a wide range of workplace misconduct, ranging from sexual harassment to safety violations, said lawyer John Roberts, who represented P&L; Coal Holdings Corp.

“The court apparently puts a lot of faith in the judgment of arbitrators, and arbitrators have regularly reinstated sexual harassers and people who violate safety regulations,” Roberts said.

The fight involved James Smith, an employee of P&L;’s Eastern Associated unit who tested positive for marijuana twice in 15 months. Smith’s job required him to drive trucks weighing 30 tons.

Both times the company sought to fire Smith, and both times an arbitrator said the company could take other disciplinary steps yet had to reinstate him.

Judges typically must abide by the rulings of an arbitrator, in large part because arbitration is designed to avoid lengthy courtroom battles. The Supreme Court in 1987 said an exception to that rule exists if an arbitration award would violate an “explicit” government policy. In Tuesday’s decision, Breyer said the public policy exception didn’t apply.