The Washington State Supreme Court recently issued an opinion regarding courts’ scope of review of arbitration decisions. This case shows how difficult it is to overturn an arbitration decision.[i]
A Port of Seattle (“Port”) supervisor noticed a rope hanging from a ladder and asked an employee to take it down. Instead, as a joke aimed at the supervisor, the employee thought it would be funny to tie the rope into a hangman’s noose and hang it from the ladder. Not surprisingly, the noose was not viewed as humorous by at least one of his minority co-workers. That co-worker made a complaint and the Port fired the amateur knot-maker for violating the Port’s zero-tolerance anti-harassment policy. The employee was a member of the International Union of Operating Engineers, Local 268 (“Union”). The Union challenged the employee’s termination. The case proceeded to arbitration, per a collective bargaining agreement.
The arbitrator found that the knot-maker violated the Port’s anti-harassment policy, but that he should not have been terminated because he was “more clueless than racist,” and the employee’s noose-on-a-ladder prank was “not racial” in nature. The arbitrator considered the employee’s twelve year history as a Port employee with no performance problems, and his history in the Navy – where he often played with rope and tied nooses to pass time – and decided that the employee should be suspended for 20-days without pay, rather than be fired.
The Port appealed the arbitrator’s decision and a King County Superior Court judge concluded that the arbitrator’s decision was too lenient and violated the public policy against workplace harassment. The King County judge then imposed a six-month unpaid suspension, and ordered the employee to make a sincere written apology, to attend diversity and anti-harassment training, and to be subject to four years of probation with a second harassment violation resulting in termination.
The Union appealed and the Court of Appeals affirmed the King County judge’s ruling to vacate the arbitrator’s decision, but held that the reviewing trial court could not create its own judgment. The Union then appealed again and the Washington State Supreme Court accepted review. The Supreme Court noted that its review was limited to whether the arbitrator exceeded his or her authority because further review “would weaken the value of bargained for, binding arbitration and could damage the freedom of contract,” but that arbitration awards can be vacated if they violate “explicit, well defined, and dominant public policy.” [ii] The Court found that the policy against workplace harassment and discrimination was explicit, well defined, and dominant so it had authority to review and vacate the arbitrator’s decision if the punishment was too lenient to not deter future discrimination.
The Court reiterated that its review was limited, and that it was bound by the arbitrator’s findings of fact, which included the employee’s non-racial understanding of the symbolism of the noose (he believed it related to “cowboys and Indians”), and the effect of the noose on other employees in the workplace. Based on this limited scope of review and despite the employee’s unacceptable and ignorant actions, the Court held that a 20-day unpaid suspension could “provide sufficient discipline to cause this or other employees to understand the serious nature of a noose in the workplace and thus prevent a similar incident in the future.”[iii] Thus, the Court held, the arbitrator’s decision was not so lenient that it violated the public policy against workplace harassment and discrimination.
Lastly, the Court reiterated that a trial court reviewing an arbitration award has the authority to vacate the award, but that it does not have the authority to fashion its own remedy. Instead, trial courts should remand to the arbitrator for further proceedings.
Comment: Construction contracts often employ arbitration as the dispute resolution mechanism. Although this case does not involve construction contractors, it does provide some insight into Washington courts’ scope of review of arbitration awards and how difficult it is to vacate an award. Even with these bizarre facts regarding the noose and the employee’s questionable understanding of what the noose suggested, the Supreme Court did not find that the arbitrator’s decision to suspend the employee for 20-days was so lenient that it violated the public policy against workplace harassment and discrimination. This case demonstrates the finality of an arbitrator’s decision such that parties subject to arbitration proceed knowing that it is extremely difficult to vacate an arbitrator’s decision.
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[i] Int’l Union of Operating Engineers, Local 286 v. Port of Seattle, 296 P.3d 736, 117 Fair Empl. Prac. Cas. (BNA) 834 (2013).
[ii] Id. at 740 (quoting Kitsap County Deputy Sheriff’s Guild, 167 Wn.2d 428, 435, 219 P.3d 675 (2009)).
[iii] Id. at 742.