504
OCTOBER TERM, 2000
Syllabus
on petition for writ of certiorari to the united states court of appeals for the ninth circuit
No. 00-1210. Decided May 14, 2001
After arbitrators found that the Major League Baseball Clubs (Clubs) colluded in the market for free-agent services after the 1985, 1986, and 1987 baseball seasons, the Clubs and petitioner agreed that the Clubs would establish a fund to be distributed to injured players. The "Framework" that petitioner designed to evaluate individual claims provided, inter alia, that players could seek an arbitrator's review of a distribution plan, but the arbitrator could determine only whether the Framework and its criteria were properly applied. Respondent Garvey sought arbitration after his damages claim was rejected. At his hearing, he produced a letter from San Diego Padres president and CEO Smith, stating that Smith had offered to extend Garvey's contract, but the Padres refused to negotiate thereafter due to collusion. The arbitrator denied the claim because the letter contradicted Smith's testimony denying collusion in earlier arbitration proceedings. The Federal District Court denied Garvey's motion to vacate the arbitrator's award. In Garvey I, the Ninth Circuit reversed. It found that review of the award's merits was warranted because the arbitrator's refusal to credit Smith's letter was inexplicable and bordered on irrational since arbitrators had previously concluded that the owners' testimony denying collusion was false, and that there was strong support for the letter's truthfulness. On remand, the District Court remanded the case for further arbitration, and Garvey appealed. Finding that Garvey I left only one possible result, the Ninth Circuit in Garvey II reversed and directed the District Court to remand the case to arbitration with instructions to enter an award for Garvey.
Held: The Ninth Circuit's decision to resolve the dispute and bar further proceedings is at odds with governing law. Judicial review of a labor-arbitration decision pursuant to a collective-bargaining agreement is very limited. Courts are not authorized to review an arbitrator's decision on the merits despite allegations that the decision rests on factual errors or misinterprets the parties' agreement. Paperworkers v. Misco, Inc., 484 U. S. 29, 36. Only when the arbitrator effectively dispenses his own brand of industrial justice may his decision be unenforceable. Steelworkers v. Enterprise Wheel & Car Corp., 363 U. S. 593, 597.
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