1 United States Court of Appeals,

Fifth Circuit.

No. 94-30681.

EXXON CORP., Plaintiff-Appellant,

v.

BATON ROUGE OIL and Chemical Workers Union, Defendants-Appellees.

March 15, 1996.

Appeal from the United States District Court for the Middle

District of Louisiana.

Before REYNALDO G. GARZA, JOLLY and DUHÉ, Circuit Judges.

E. GRADY JOLLY, Circuit Judge:

This appeal requires us to determine whether, as a matter of

national policy, the federal courts must decline to enforce an

arbitrator's award that orders only backpay—not reinstatement—for

an employee who was fired because of drug use, but also fired in

violation of the terms of his collective bargaining agreement. The

case arose from the discharge of Donald Chube by Exxon Corporation

for his violation of the company's policy on alcohol and drug use.

Chube worked as a supervisor in a "safety-sensitive position," and

was discharged after a drug test indicated that he had used

cocaine. After Exxon terminated Chube, the Baton Rouge Oil and

Chemical Workers Union grieved his discharge and won an order for

Chube's reinstatement and back pay. The district court affirmed

the arbitrator's alternative order for reinstatement only. Exxon

appeals. We reverse and render.

I

Exxon operates a chemical plant near Baton Rouge, Louisiana.2

The production and maintenance employees operate under a collective

bargaining agreement dated March 31, 1988. Chube, who was

ordinarily an operator in the olefins purification department, had

been "stepped up" to a safety-sensitive classification, operations

controller, in which he acted as a temporary supervisor. The

record is unclear as to the permanency of this position, but it is

clear that he was acting as a temporary supervisor at the time that

he was drug-tested.

In 1987 Exxon rev ised its alcohol and drug use policy. The

new policy authorized unannounced searches for drugs and alcohol on

Exxon property. It also required employees to submit to alcohol

and drug testing "where cause exists to suspect alcohol or drug

use." A positive test result or refusal to submit to a test was

grounds for disciplinary action, including termination. One year

after Exxon revised its policy, the Drug-Free Workplace Act of

1988, 41 U.S.C. § 701 -707, was enacted. To clarify its policies

and to comply with the Act, Exxon pub lished a list of "Posted

Offenses," giving notice that an employee who committed one of the

following offenses could be discharged or otherwise disciplined

without notice:

a. Being under the influence of alcohol, in the opinion of a

doctor, Company guard, or supervisor, on Company time or

property.

b. Bringing onto Company property, or possessing or using on

Company time or property, an alco holic beverage, a

habit-forming drug, or a drug which the Company believes may

impair the employee's ability to perform duties in a safe and

responsible manner.

c

. Habitual use of an alcoholic beverage or habit-formi n g

drug; except where the Company doctor believes that such use1 The proposed policy change came to the Union's attention in

April 1989, when Exxon published a notice advising its employees

that it would be implementing a new policy, and summarizing the

policy as follows:

[A]n employee who has had or is suspected of having a

substance abuse problem will not be allowed to work in

certain positions. The positions, to be decided by

management, will include critical jobs where operating

problems could result in major risks to employees,

public safety, and facilities. In addition, random

drug and alcohol testing will be conducted when an

employee: (1) has had a substance abuse problem, (2)

returns from rehabilitation, (3) is assigned to certain

positions, or (4) fills a position where testing is

required by law.

3 is necessary for the employee's health.

In early 1989, Exxon proposed to add random drug tests for a

group of "designated positions" with critical safety

responsibilities. Chube's job as temporary supervisor was one of

these "designated positions." His permanent position as operator

was not covered, however. The Union objected to the policy

changes. 1 It expressed concern that the policy did not provide for

employee rehabilitation. The Union also objected that the random

test policy would not give employees ample notice that they would

be subject to testing. Discussions between the Union and Exxon

reached a n impasse. Consequently, in August 1989, Exxon

unilaterally issued a Revised Alcohol and Drug Abuse Policy, which

was to be effective September 1, 1989. The policy contained the

following paragraph:

Exxon may conduct unannounced searches for drugs and alcohol

on owned or controlled property. The Company may also require

employees to submit to medical evaluation or alcohol and drug

testing where cause exists to suspect alcohol or drug use.

Unannounced periodic or random testing will be conducted when

an employee meets any one of the following conditions: has4

had a substance abuse problem or is working in a designated

position identified by management, a position where testing is

required by law, or a specified executive position. A

positive test result or refusal to submit to a drug or alcohol

test is grounds for disciplinary action, including

termination.

On August 24—a week before the new policy was to become

effective—Chube, as an employee in a "highly sensitive position,"

was given a drug test, and the test was positive for cocaine use.

On Sept ember 13, Exxon discharged Chube "for violating the

Company's Alcohol and Drug Policy," but did not set out the precise

nature of the violation. The Union filed a timely grievance on

Chube's behalf, and when the matter was not resolved through the

grievance process, the Union demanded arbitration. The issue

stipulated for the arbitrator was whether Exxon had vio lated the

contract when it discharged Chube and, if so, what should be the

remedy.

The Union argued that, under Exxon's policies then in effect,

the drug screen administered to Chube was solely to determine his

eligibility to be assigned to a "designated position"; the test

results could not be used for purposes of discipline because he had

violated no posted rule in effect at the time of the test. Exxon

responded that all employees had been given ample notice that a

positive drug test would result in di scharge. Furthermore, its

policy was based on the obvious need to protect lives and property

against possibly devastating accidents.

The arbitrator determined that the critical issue in the case

was, not whether Chube engaged in the use of illegal drugs, but

whether in this instance the presumed use of cocaine gave Exxon the5

right under the contract to discharge Chube. He concluded that

Exxon violated § 1121 of the contract by discharging Chube. That

section reads as follows:

1121. General

(a) The Company may discipline an employee only for

cause.

(b) The Company has posted a list of offenses which merit

discipline. This list is dated January 3, 1984. Before

the Company may make any change in this list or any

subsequent list, the change must be agreed to by the

Union.

(c) If an employee commits one of the posted offenses, it

is cause for discipline, and the Company may discipline

him without advance notice.

(d) Even though an employee does not commit a posted

offense, his conduc t or work performance may still be

cause for discipline. However, the Company may not

discipline hi m without giving him advance notice, and

where practicable, an opportunity to correct the

situation.

The arbitrator found that, under § 1121(b), Exxon could

discharge Chube "without advance notice" only if Chube committed a

posted offense. He further found that Chube had committed none of

the posted offenses in effect on the date of the tests;

specifically, there was no evidence that he had brought drugs on

company property or possessed or used drugs on company time, or

habituall y used a habit-forming drug. The arbitrator noted that

the 1989 drug policy did not become effective until September 1,

1989, and that Chube was tested before that date. Further, and at

the heart of our review today, the arbitrator rejected Exxon's

argument that, notwithstanding whether Exxon breached the

collective bargaining agreement, Chube's discharge was justified2 Chube was in prison on the date for his reinstatement.

6 based on a strong public policy against the use of drugs.

The a r bitrator's award required Exxon to reinstate Chube

without loss of seniority, and pay him back pay and benefits,

"calculated on the basis of [Chube's] permanent classification wage

level." Alternatively—and only because Chube was incarcerated

after his discharge for selling drugs—the arbitrator required Exxon

to pay him one ye ar's back pay in the event that Chube was still

unavailable for reinstatement. 2

Exxon then instituted this suit in the United States District

Court for the Middle District of Louisiana, seeking, by motion for

summary judgment, to vacate the arbitration award. The Union filed

a cross motion for summary judgm ent, seeking enforcement of the

award on the remedy of back pay plus costs, and not on the remedy

of reinstatement. After the district court granted the Union's

motion for summary judgment and enforced the arbi trator's award,

Exxon timely appealed.

II

We review a grant of summary judgment de novo. Calpetco 1981

v. Marshall Exploration, Inc., 989 F.2d 1408, 1412 (5th Cir.1993).

Once a properly supported motion for summary judgment is presented,

the burden shifts to the non-moving party to set forth specific

facts showing that there is a genuine issue for trial. A nderson v.

Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 2510-11, 91

L.Ed.2d 202 (1986); B rothers v. Klevenhagen, 28 F.3d 452, 455 (5th

Cir.1994), cert. denied,

--- U.S. ----, 115 S.Ct. 639, 130 L.Ed.2d7

545 (1994). We review "the facts drawing all inferences most

favorable to the party opposing the motion." Matagorda County v.

Russell Law, 19 F.3d 215, 217 (5th Cir.1994).

Review of an arbitration proceeding is narrowly limited. A

court will not disturb an award if it "draws its essence from the

collective ba rgaining agreement" and is not based on the

arbitrator's "own brand of industrial justice." U nited

Steelworkers of America v. Enterprise Wheel & Car Corp., 363 U.S.

593, 597, 80 S.Ct. 1358, 1361, 4 L.Ed.2d 1424 (1960). We may not

reconsid er an award based on alleged errors of fact or law or

misinterpretation of the contract. U nited Paperworkers Int'l Union

v. Misco, Inc., 484 U.S. 29, 36, 108 S.Ct. 364, 369-70, 98 L.Ed.2d

286 (1987). However, we may scrutinize the award to ensure that

the arbitrato r complied with the jurisdictional prerequisites of

the collective bargaining agreement. E .I. DuPont de Nemours and

Co. v. Local 900 of Int'l Chemical Workers Union, 968 F.2d 456 (5th

Cir.1992) (internal quotations and citations omitt ed). The

district court may vacate an arbitrator's award if the arbitrator

exceeded its arbitral authority provided for in the agreement. I d.

Notwithstanding our normally narrow review of an arbitrator's

award, if that award is contrary to public policy, the award cannot

be enforced. A federal court may vacate the award if it is

"clearly shown" that the award violates "well-defined and dominant"

policy drawn from existing laws and legal precedent. W .R. Grace

and Co. v. International Union of Rubber Workers, 461 U.S. 757,

766, 103 S.Ct. 2177, 2183-84, 76 L.Ed.2d 298 (1983); M isco, 4843 Exxon also argued in its brief that the award did not "draw

its essence from the contract" because it conflicted with three

previous arbitration awards interpreting Exxon's alcohol and drug

use policy and the Contract. Exxon contends that the arbitrator

exceeded his authority under that section of the Contract that

provided that the arbitrator must give prior awards res judicata

effect. Because we find in Exxon's favor relative to its first

argument, we need not reach the second.

8 U.S. at 43-45, 108 S.Ct. at 374-75. It is on public policy

grounds, as reflected in our opinion in Gulf Coast Indus. Workers

Union v. Exxon Corporation, 991 F.2d 244, 248-55 (5th Cir.), cert.

denied,

--- U.S. ----, 114 S.Ct. 441, 126 L.Ed.2d 375 (1993), that

we scrutinize the arbitrator's award in this case.

III

In this respect, Exxon argues that t he arbitrator's award

violates publ ic policy because it orders reinstatement of "a

cocaine user and convicted drug dealer to a highly safety-sensitive

job." 3 Exxon contends that well-defined public policy, articulated

by this court in Gulf Coast Indus. Workers, prohibits the return of

drug users to jobs that pose a threat to the safety o f other

workers and/or the general public. It argues that allowing the

arbitration a ward to stand, whether it involves reinstatement or

merely payment of back pay, undermines the public policy against

the use, possession, or positive testing for alcohol or drugs in

the workplace.

The Union effectively counters that the order of reinstatement

is moot; it only seeks enforcement of the arbitrator's alternative

award limited to back pay. The Union admits that a public policy

against drug use in saf ety sensitive positions exists; it9

contends, however, that that public policy is not at issue in this

case because of the impossibility of reinstating Chube to his prior

position. Generally adopting this view of the case, the district

court observed that the arbitrator would have erred if it had

actually required Exxon t o reinstate Chube, but agreed with the

Union that Chube was not available for reinstatement, and that that

portion of the award was therefore immaterial to the appeal.

IV

We begin our public policy analysis with an examination of

W.R. Grace, in which the Supreme Court clearly articulated the

public policy standard. In that case an employer signed a

conciliation agreement with the Equal Employment Opportunity

Commission ("EEOC"). The agreement conflicted with the collective

bargaining agreement because it rescinded certain provisions of the

bargained-for seniority sys tem to allow advancement of some

minorities, which prompted adversely affected employee s to file

grievances. Ultimately, the Supreme Court was called upon to

determine whether the collective bargaining agreement was

unenforceable as violative of public policy. The court began by

observing tha t a collective bargaining agreement is a contract,

and, "as with any contract, a court may not enforce a collective

bargaining agreement that is contrary to public policy." W .R.

Grace, 461 U.S. at 766, 103 S.Ct. at 2183. The Court stated:

If the contract as interpreted by [the arb itrator] violates

some e xplicit public policy, we are obliged to refrain from

enforcing it. Such a public policy, however, must be well

defined and dominant, and is to be ascertained "by reference

t o the laws and legal precedents and not from gene ral

considerations of supposed public interests."10

Id. (citations omitted). The Court concluded that the company's

voluntary commitment to two conflicting contractual obligations was

a dilemma of its own making, and that enforcement of the collective

bargaining agreement in the employees' favor violated no explicit

public policy.

Four years later, in Misco, a paper plant employee was

discharged after police apprehended him in a co-worker's car that

was filled with marihuana smoke. The company asserted that the

employee's action violated its rule against having an illegal

substance on company property. The arbitrator upheld the union's

grievance and ordered the employee reinstated, and the company

filed suit to have the award vacated. The district court set aside

the award on public policy ground s. A panel of this circuit

affirmed, articulating the policy as "one against the operation of

dangerous machinery by persons under the influence of drugs or

alcohol." Misco Inc. v. United Paperworkers International Union,

AFL-CIO, 768 F.2d 739, 743 (5th Cir.1985).

The Supreme Court reversed, holding that we had not followed

W.R. Grace 's command to identify with specificity the existing

laws and legal precedents underlying our public policy decision.

The Court reiterated its holding from W.R. Grace that allowing

public policy to bar the enforcement of an arbitrator's award is

little more t han "a specific application of the more general

doctrine, rooted in the common law, that a court may refuse to

enforce contracts that violate law or public policy." Misco, 484

U.S. at 42, 108 S.Ct. at 373. As we observed in Gulf Coast,11

The Supreme Court re-emphasized in Misco that, when applying

the nar row public policy exception, courts are forbidden to

use imprecise notions of public policy which would allow

ill-defined considerations to negate the rule favoring

judicial deference. "At the very least," wrote Justice White,

"an alleged public policy must be properly framed under the

approach set out in W .R. Grace, and the violation of such a policy must be clear l y shown if an award is not to be

enforced." 484 U.S. at 43, 108 S.Ct. at 373.

Gulf Coast Indus. Workers Union, 991 F.2d at 249.

In Gulf Coast, our defi nitive post- M isco case, we again

applied the p ublic policy exception to bar enforcement of an

otherwise valid arbitrator's award. Exxon discharged an employee

for violating its Alcohol and Drug Use Policy and for breaching an

employee after-care agreement. The Union filed a grievance

conte sting the termination, and the arbitrator held that summary

discharge was unjustified and too harsh a penalty for the

employee's violations. The arbitrator directed Exxon to reinstate

Woods to his previous job without backpay, contingent upon a

negative drug and alcohol screen. After the Union instituted suit

to enforce the award, the district court granted Exxon's

cross-motion for summary judgment, and vacated the arbitration

award.

On appeal, we reviewed applicable law, including W .R. G race

and Misco. We recognized that the district court had not

"ground[ed] its decision upon an articulated review of laws and

legal precedents that frown upon the reinstatemen t of such

employees." G ulf Coast, 991 F.2d at 250. We noted that the

district court had applied a "common sense public policy approach,"

and explained that we may not "use imprecise notions of public12

policy which would allow ill-defined considerations to negate the

rule favoring judicial deference." I d. at 249. We nevertheless

affirmed vacating the arbitrator's award, holding "that it offends

public policy f or Woods, an employee who occupies a

safety-sensitive position, to retain his job upon testing positive

for cocaine while on the job and after having breached his

company's drug ab use policy on two occasions—first when he broke

his pledge of abstinence, and second when he failed to disclose his

relapse." I d. We supported our holding by noting that "[t]here

are countless statutes, regulations, company guidelines, and

judicial decisions that pronounce the emphatic national desire to

eradicate illicit drugs from the workplace." Id.

Since Misco, the Supreme Court has recognized a public policy

against drug use in the workplace (in a slightly different

context), stating that the government has a strong interest in

preventing employees "from using alcohol or drugs while on duty" to

e nsure the safety of the public and the employees. S kinner v.

Railway Labor Executives Ass'n, 489 U.S. 602, 621, 109 S.Ct. 1402,

1415, 103 L.Ed.2d 639 (1989) (holding, in context of challenge to

Federal Railr oad Administration drug and alcohol testing rules,

that such tests were reasonable under the Fourth A mendment even

though there was no requirement of warrant or reasonable suspicion,

because of compelling government interest).

V

Thus, we come to the question of whether, notwithstanding

Exxon's clear breach of the collective bargain ing agreement, we13

will deny enforcement of the arbitrator's award under the

circumstances of this case. The Union makes a forceful argument

that the case at bar must be distinguished from Gulf Coast, because

the Union seeks only to enforce an aw ard of back pay to Chube—an

award that cannot be said to contain the element of endangerment

t hat underlay our decision in Gulf Coast. In this case, the

arbitrator heeded the admonition in our caselaw that such an order

would violate public policy, and consequently crafted its order so

that Chube would not be placed back into a safety-sensitive

position. This distinction, the Union argues, in combination with

Misco 's requirement of a hands-off approach to a review of an

arbitrator's award, is sufficien t to warrant affirmation of the

arbitrator's award.

After thorough consideration of this argument, we cannot

agree. It is undisputed that Chube occupied a safety-sensitive

position. It is also undisputed that Chube tested positive for

cocaine use while occupying that position, and thereby endangered

th e safety of other employees. We think that the public policy

exception articulated in Gulf Coast must be read not only to

prohibit the prospective placement of an employee into a position

where he is a danger to his company and to fellow employees (i.e.,

order of reinstatement into a safety-sensitive position), but also

to prohibit a ret rospective approval of the conduct that created

the unsafe situation in the first place (i.e., order of back pay or

reinstatement into the job the employee held before promotion to a

safety-sensitive posit i on). In addition to addressing future4 Federal authority included the 1988 Drug-Free Workplace

Act, 41 U.S.C. §§ 701-707, Defense Department regulations

mandating a drug-free workplace (48 C.F.R. 223.5 (1992)), and the

Americans with Disabilities Act, 42 U.S.C. §§ 12101-12213, which

affirmatively excludes from protection persons who are using

drugs. The defendant in the Gulf Coast case, as in the case at

bar, was Exxon. Obviously, the same statutes continue to apply

to Exxon.

5 We note that the State of Louisiana has adopted drug

testing procedures and standards to be used by Louisiana

businesses, further evidencing the clear public policy against

drug use in that state. See La.Rev.Stat. Ann. §§ 49:1001-1015

(West Supp.1995).

14 con duct, the public policy against drug use in safety-sensitive

positions also must look back to the conduct that is the subject of

t he grievance. The policy looks to the future to ensure safety,

but looks back to deny condonation of misconduct.

We think that the public policy against drug use in safety

sensitive positions that we enuncia ted in G ulf Coast would be

weakened by the a rbitrator's order in this case. It suggests to

the drug user in a safety-sensitive position that th e maximum

penalty that he might incur would either be reinstatement to his

position prior to assuming the safety-sensiti ve duties, or, if

reinstatement were impossible, back pay at the rate of his former

position. Such a suggestion is consistent neither with the public

policy we articulated in Gulf Coast, nor the statutes, regulations,

and case law we cited in support of that public policy. In G ulf

Coast, we highlighted the various legal sources r eflecting our

nation's "well defined and dominant" desire for a drug-free

society. We cited federal statutes, 4 state statutes, 5 and various

regulations. We also relied on previous case law that condemned6 See, e.g., Oil Workers Loc. 4-228 v. Union Oil Co. of Cal.,

818 F.2d 437, 442 (5th Cir.1987) (recognizing this Circuit's

strong public policy against operation of dangerous machinery by

persons using drugs or alcohol).

7 See, e.g., Union Oil, 818 F.2d at 439, 441 n. 3 (affirming

arbitrator's emphasis on "the danger inherent in the oil refinery

work environment" where "fires and explosions often occur ...

with calamitous and costly results").

8 We are not unmindful of certain inequities, as between the

company and the Union, that arise here: the Union has incurred

significant expense in defending its contractual position—a

position that has been upheld. The company, on the other hand,

who has been held to have breached the contract, receives the

benefit of incurring no monetary liability. We apply the public

policy exception here only because we are absolutely convinced

that public policy, as reflected in the body of this opinion,

does not permit the grievant in this case to receive any monetary

award.

15 the presence of drugs in the workplace, 6 and that noted the dangers

associated with petro-chemical refineries. 7 In reviewing the legal

sources we identified in Gulf Coast, we entertain no doubts that

each of these base s is equally relevant to the case before us

today.

VI

We recognize that, under Misco, it is the rare case where

public policy trumps the terms of a bargained-for agreement between

a union and a cor poration. 8 We conclude, however, that the

arbitrator's award and remedy under the facts of this case—ordering

reinstatement of or monetary award to an employee who, while

working in a safety-sensitive position, tested positive for the use

of drugs—violate well-established public policy against the use of

drugs by employees in safety-sensitive posi tions. We therefore

REVERSE the arbitrator's award in favor of Donald Chube, and RENDER16

judgment in favor of Exxon Corporation.

REVERSED and RENDERED.