Sunday, March 1, 2015

Adrian Peterson, arbitration and the law of the shop

The decision of Judge David Doty in the NFLPA's challenge to the award in the Adrian Peterson case has been the subject of considerable press. Despite earlier predictions about the difficulty of overturning arbitration awards, Judge Doty has vacated the award on two distinct grounds. NFL Players Association v. NFL and NFL Management Council

Peterson had been suspended for his actions relating to what he claimed was the discipline of his child. The suspension was imposed pursuant the Commissioner's authority under the cba to discipline a player for "conduct detrimental to the integrity of, or public confidence in, the game."  Under the Standard Player Contract the Commissioner, upon a finding of such conduct, has " the right, but only after giving Player the opportunity for a hearing ... to fine Player in a reasonable amount; to suspend Player for a period certain or indefinitely; and/or to terminate this contract."

 After a dispute about the scheduling and scope of a hearing, and without hearing directly from Peterson, the Commissioner suspended him for the remainder of the season, fined him six weeks pay, inclusive of amounts forfeited during the suspension, and ordered him to participate in a counselling and treatment program.

Under the process contained in the cba, the NFLPA appealed the discipline to a hearing officer appointed by the Commissioner. The Union claimed that the Commissioner had improperly, and retroactively, imposed discipline on Peterson pursuant to a new policy issued after the adverse publicity concerning the discipline of Ray Rice. The Union maintained that under the policy in existence at the time of the incident in issue, the presumptive penalty was a two game suspension. The Union also claimed that Peterson had been deprived of a fair hearing, that the imposition of psychiatric counseling was not permissible under the cba, and that the Exempt List had improperly been used as a form of discipline. In support of its claim the Union relied, in part, on the decision of Judge Barbara Jones (here) in connection with the appeal of the discipline imposed on Ray Rice. The Union asserted that the Rice decision established that the new policy could not be applied retroactively and that this decision had become "the law of the shop."

After a hearing, the Hearing Officer rejected each of the Union's arguments. (The decision of Hearing Officer Harold Henderson can be found here). He concluded that the Commissioner had broad discretion to impose discipline under the cba and found the new policy consistent with the prior one. He acknowledged that the discipline imposed was greater than that imposed in previous cases under the prior policy but found that it involved "one of the most egregious cases of domestic violence in this Commissioner's tenure." He also rejected the claims that Peterson had been improperly denied a hearing and that the Commissioner had no authority to require counseling. Accordingly he denied the grievance and affirmed the discipline.

The NFLPA filed suit to vacate the award. The NFLPA's complaint can be found here. It maintained that the award violated "the essence of the cba," that Henderson exceeded his authority by deciding whether the discipline was permissible under the old policy, that the award was fundamentally unfair given the retroactive application of the new policy and that Henderson was an evidently partial arbitrator.

While recognizing the substantial deference ordinarily given by courts to arbitrator's awards, Judge Doty noted that "Arbitration awards ... are not inviolate, and the court need not merely rubber stamp the arbitrator's interpretations and decisions." He explained:

Although the court may not vacate an award if the arbitrator was “arguably construing or applying the CBA,” vacatur is proper when the award “fails to draw its essence from the CBA or is contrary to the plain language of the [CBA].” Bureau of Engraving, Inc. v. Graphic Commc’ns Int’l Union, Local 1B, 164 F.3d 427, 429 (8th Cir. 1999). “The essence of the CBA is derived not only from its express provisions, but also from the industrial common law.” Id. The industrial common law includes “past practices of the industry and the shop,” i.e., the law of the shop, and “the parties’ negotiating history and other extrinsic evidence of intent.” Id.; see also United Steelworkers of Am. v. Warrior & Gulf Navigation Co., 363 U.S. 574, 581-82 (1960) (“The labor arbitrator’s source of law is not confined to the express provisions of the contract, as the industrial common law - the practices of the industry and the shop - is equally a part of the collective bargaining agreement although not expressed in it.”) The law of the shop necessarily includes prior arbitration awards. See Warrior & Gulf, 363 U.S. at 581 (“The processing of disputes through the grievance machinery is actually a vehicle by which meaning and content are given to the collective bargaining agreement.”).

 Judge Doty agreed with the NFLPA that, in this case, Henderson's award failed to draw its essence from the cba. He found that "in the Rice decision, the hearing officer unequivocally recognized that the New Policy cannot be applied retroactively." He rejected Henderson's efforts to distinguish the Rice decision as one involving double punishment and observed that Henderson had not explained why the "well recognized bar against retroactivity" did not apply to Peterson. The Judge concluded:

Even leaving the Rice decision aside, it is not seriously contested that the Commissioner understood he was constrained to apply the New Policy prospectively.... United Transp. Union, Local Lodge No. 31, 434 F2d 220, 222 (8th Cir. 1970) (recognizing that the law of the shop includes the understanding of the parties). Henderson simply disregarded the law of the shop and in doing so failed to meet his duty under the CBA. As a result, the arbitration award fails to draw its essence from the CBA and vacatur is warranted. See Trailways Lines, Inc. v. Trailways, Inc. Joint Council, 807 F.2d 1416, 1423 (8th Cir. 1986) (finding that failure to consider the law of the shop can be the sole basis to vacate an arbitration award).

The Judge also concluded that Henderson exceeded his authority by adjudicating the "hypothetical question" of whether Peterson's discipline could be sustained under the earlier policy. He determined that the NFLPA had not submitted that issue to the hearing officer, but only "the pure legal issue" of whether the New Policy could be applied retroactively." Finding that Henderson had "strayed" beyond the issues submitted by the NFLPA the Judge concluded that vacatur was warranted on that basis as well.

In light of these two conclusions, Judge Doty found it unnecessary to decide whether Henderson was evidently partial or whether the award violated fundamental fairness. He granted the petition to vacate the award and remanded the case "for such further proceedings consistent with this order as the CBA may permit."

The NFL has issued a statement, here, expressing its disagreement with the decision and its intent to appeal.

Update: The Eight Circuit has reversed the decision of the District Court and remanded with direction to dismiss the petition to vacate. The Court's opinion can be found here. The Court's opinion is discussed at Eighth Circuit on the law of the shop and the scope of the issue to be decided

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