Major League Baseball Players Assn. v. Garvey
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532 U.S. 504 (2001)
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OCTOBER TERM, 2000
MAJOR LEAGUE BASEBALL PLAYERS ASSOCIATION v. GARVEY
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 laborarbitration 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.
When the judiciary weighs a particular claim's merits, it usurps a nmction entrusted to the arbitrator. As a rule a court must not foreclose further proceedings by settling the merits according to its own judgment of the appropriate result. It should simply vacate the award, leaving open the possibility of further proceedings if the agreement permits them. The Ninth Circuit recited these principles but erred in applying them. In Garvey I, it overturned the arbitrator's decision because it disagreed with his factual findings with respect to credibility, but even serious error on the arbitrator's part does not justify overturning his decision where, as here, he is construing a contract and acting within the scope of his authority, Misco, supra, at 38. And in Garvey II, the court resolved the dispute's merits based on its assessment of the record before the arbitrator, which it ordinarily cannot do, no matter how erroneous the arbitrator's decision, Misco, supra, at 40, n. 10. Even when the arbitrator's award may properly be vacated, the appropriate remedy is to remand the case for further arbitration proceedings.
Certiorari granted; 243 F.3d 547, reversed and remanded.
The Court of Appeals for the Ninth Circuit here rejected an arbitrator's factual findings and then resolved the merits of the parties' dispute instead of remanding the case for further arbitration proceedings. Because the court's determination conflicts with our cases limiting review of an arbitrator's award entered pursuant to an agreement between an employer and a labor organization and prescribing the appropriate remedy where vacation of the award is warranted, we grant the petition for a writ of certiorari and reverse. The motions for leave to file briefs amicus curiae of the National Academy of Arbitrators and the Office of the Commissioner of Baseball are granted.
In the late 1980's, petitioner Major League Baseball Players Association (Association) filed grievances against the Major League Baseball Clubs (Clubs), claiming the Clubs had colluded in the market for free-agent services after the 1985, 1986, and 1987 baseball seasons, in violation of the industry's collective-bargaining agreement. A free agent is a player who may contract with any Club, rather than one whose right to contract is restricted to a particular Club. In a