Document: 461 U.S. 757 103 S.Ct. 2177 76 L.Ed.2d 298 W.R. GRACE AND COMPANY, Petitionerv.LOCAL UNION 759, INTERNATIONAL OF the UNITED RUBBER, CORK, LINOLEUM PLASTIC WORKERS AMERICA. No. 81-1314. Argued Feb. 28, 1983. Decided May 31, Syllabus Faced with prospect of liability for violations Title VII Civil Rights Act 1964 in its hiring practices, petitioner employer signed Equal Employment Opportunity Commission (EEOC) a conciliation agreement that conflicted seniority provisions petitioner's existing collective-bargaining respondent union. Petitioner sued Federal District Court to enjoin arbitration certain employee grievances under agreement. The held should prevail respect layoffs employees conflict Appeals reversed and compelled arbitrate. Among arbitrated were those two who had been laid off pursuant violation arbitrator awarded backpay damages against agreement, interpreting as not requiring him follow contrary prior award involving same contractual issue, providing Court's order did extinguish breach, good-faith defense claims provisions. then brought an action overturn award, entered summary judgment petitioner, finding public policy prevented enforcement during period Appeals' reversal action. reversed. Held: question is properly be enforced. Pp. 764-772. (a) A federal court may overrule arbitrator's decision simply because believes own interpretation would better one. Thus, here, regardless what this view might correctness interpretation, bargained second-guess it. analysis merits grievance entitled deference. 764-766. (b) Enforcement interpreted by will compromise obedience order. Even assuming was mandatory injunction, nothing required violate neither mandated nor conducted according but retrospectively breach cornered actions cannot now argue violates policy. No violated holding obligations, which bar attempted reallocation union members burden losses resulting from employment discrimination. 766-770. (c) Nor inappropriately affect favoring voluntary compliance VII. Although EEOC agreed nullify agreement's provisions, process include respondent. Absent judicial determination, EEOC, mention alter without respondent's consent. Pp.770-772 652 F.2d 1248 (5 Cir.1981), affirmed. Peter G. Nash, Washington, D.C., petitioner. Carter Phillips, E.E.O.C. amicus curiae, special leave Court. Laurence Gold, Justice BLACKMUN delivered opinion 1 1964, amended, (Commission or EEOC) collective bargaining obtained order, later on appeal, prevail. issue presented whether correct enforcing arbitral 2 * A. 3 In October 1973, after lengthy investigation, EEOC's Director determined there reasonable cause believe Grace Company (Company) 78 Stat. 253, 42 U.S.C. §§ 2000e 2000e-17 (1976 ed. Supp. IV), discriminating Negroes women at Corinth, Miss., plastics manufacturing facility. App. 2. addition, found departmental plant-wide systems, Company's Local Union 759 (Union), unlawful they perpetuated effects past invited, § 706(b) Act, 2000e-5(b), conciliate dispute. also invited participate, declined do so. B 4 between expired March 1974, failed negotiations led strike. hired strike replacements, some whom took jobs never before women. settled signing new continued plant system specified strikers returned work, retained replacements. replacements assigned positions Corinth ahead men greater seniority. Specifically, exercising shift preference (to agreement) obtain affected filed procedures established 5 refused join ultimate arbitration. Instead, it 301 Labor Management Relations 1947, 61 156, 29 185, United States Northern Mississippi. sought injunction prohibiting while negotiated Commission. counterclaimed compel 6 Before any action, dated December 11, 1974. 10. addition ratifying position dispute, provided event layoffs, maintain proportion plant's unit. 15-16. amended complaint add defendant request barring seeking relief terms cross-claimed declaratory prevailed, or, alternative, bona fide protected 703(h) 259, 2000e-2(h).1 7 While cross-motions consideration, Several layoff, have grievances. November 1975, still refusing arbitrate, granted Company. It could modified alleviate Southbridge Plastics Division, & Co. v. 403 F.Supp. 1183, 1188 (1975). declared binding all parties "all . shall abide thereby." 44.2 appealed, no party stay. 8 With Union's appeal pending Fifth Circuit, Company, following more employees. Again, adversely male January 1978, over years decision, 565 913. Applying Teamsters States, 431 324, 97 1843, 52 396 (1977), decided animated discriminatory purpose, lawful F.2d, 916. counterclaim, compelling arbitrate 9 response reinstated grievances, backpay, proceeded first reach demoted effect. Arbitrator Anthony J. Sabella, August concluded although grievant inequitable penalize conduct complied outstanding 45. He thus denied grievance. Id., 47. Instead filing set aside chose contest Sabella's reasoning arbitrations. C 10 next resulted dispute here. 48. Gerald Barrett complaints before, one man after, entry order.3 Acknowledging Sabella resolved id., 51, considered award. not. limited authority, found, considering express contract violated.4 Because fairness contract, he acted outside his contractually defined jurisdiction. 55-56. finality clause agreement5 therefore require Ibid. 11 turned him. agreement,6 56, accepted contention good faith however, made exception risk breaching held, complain law ultimately out unfortunate decision. essence, breach. D 12 instituted another Mississippi reversal. 58-69. Circuit (1981). We certiorari decide important labor case presents. 458 ---, 102 3481, 73 1365 (1982). II 13 sole Under well standards review awards, Steelworkers Enterprise Wheel Car Corp., 363 593, 596, 80 1358, 1360, 1424 (1960). When their choose disputes concerning constructions arbitrator. Unless does "dra[w] essence agreement," 597, S.Ct., 1361, bound enforce This remains so even when basis ambiguous. 598, 1361. 14 standard, seems us taken somewhat circuitous route result.7 Barrett's initial conclusion based defining jurisdiction perceived obligation give preclusive See nn. 5, supra. authority arbitrators subject bargaining, just other provision, scope itself delegated conclusions deprived precedential force draw "essence" Regardless our interpretation. U.S., 599, 1362. 15 gave weigh fashion faith. conceivably we different result interpret ourselves,8 say III 16 As Hurd Hodge, 334 24, 34-35, 68 847, 852-53, 92 L.Ed. 1187 (1948). precluded consideration question, and, event, resolution courts. International Brotherhood Washington Employers, Inc., 557 1345, 1350 (CA9 1977); 453 Otis Elevator Co., 314 25, (CA2 1963), cert. denied, 373 949, 83 1680, 705 (1963); Kaden, Judges Arbitrators: Observations Scope Judicial Review, Colum.L.Rev. 267, 287 (1980). If explicit policy, are obliged refrain 35, 853. Such must dominant, ascertained "by reference laws legal precedents general considerations supposed interests." Muschany 324 49, 66, 65 442, 451, 89 744 (1945). 17 beyond orders An issued acting within obeyed until vacated withdrawn. Walker City Birmingham, 388 307, 313-314, 87 1824, 1828, 18 1210 (1967); Mine Workers, 330 258, 293-294, 67 677, 695-96, 91 884 (1947); Howat Kansas, 258 181, 189-190, 277, 280-81, 66 550 (1922). provision performance has enjoined unenforceable. Restatement (Second) Contracts 261, 264 Here, Given desire reduce workforce, undeniable faced dilemma: both contempt citation liability. dilemma, making. committed voluntarily conflicting obligations. rights, declaration respective obligations contracts. During course litigation, rights finally determined,9 again dishonored Union. For these acts, incurred contract. effect, allocate caused proved erroneous.10 19 injunction,11 layoffs12 retrospectively, provisions.13 20 case, actually here causes disobey if dilemma future. create intolerable incentives orders. Courts sufficient powers protect injunctions, injunctions erroneously. 315, 1829. sanctions, possible departed conducting layoffs. actions, 21 placing unfair Obeying often costly affair.14 alleged discrimination women, readjustments consequent occur. bear losses. Barrett, placed unavoidable By entering into excuse performing subsequently mistaken loss employees, shared responsibility sex assumed arbitrators' interpretations burden. 22 Voluntary Congress intended cooperation preferred means Alexander Gardner-Denver 415 36, 44, 94 1011, 1017, 39 147 (1974). Critical scheme Commission's role settling through conference, conciliation, persuasion plaintiff bring suit. 2000e-5(b). 23 Commission, 1017 (Commission's power investigate coercive effect). Permitting such undermine assurance honored. Charles Dowd Box Courtney, 368 502, 509, 82 519, 523, 483 (1962). ability abrogate unilaterally encourage employer's added incentive paid union's rights. 24 Aside legality conferring employer, unlikely further true interested parties. innocent efforts position, make concessions know agree consent 25 fact, law. If, only faces liability, enter hope obtaining exchange helping avoid potentially liable, joint interests work share burdens imposed demands. On view, complement each other, rather than conflict. IV 26 foregoing reasons, 27 ordered. complaint, unlike pleadings, expressly 28 2201 2202. 75-4416 (CA5), pp. 98, 123-124, 129-130. viewed 913, 915 (1978). relevant text follows: "(1) executed defendant, upon action; "(2) Where controlling 44. Neither attached significance distinction grievants. Brief Amicus Curiae 6, n. 6. Our eliminates need consider 1974 succeeding 1977 "The confined exclusively application Agreement to, adjust, change, modify Agreement." Art. IV, 3; 19, 31. agreements part: adjudicated final aggrieved Company." 4; 20, 32. provided: "If procedure unjustly discharged suspended former job compensated regular hourly earnings time lost less penalty upon." 7(a); 21, 32-33. believed validity dispositive 1252, raised argued enforceable. Appellant 80-3661 18-30. disagree court's premise relevant. Only enforceability issue. contained "In State Laws hereinafter enacted, supersede affecting remainder provisions." XIV, 7; 29, 42. Appeals, "legality" superceded determination illegal. responded reversing retroactive effect always existed. 1255. us, argument itself, privilege permitted courts reviewing illegal 355-356, 1864-65, (1977). enforced face valid alteration Franks Bowman Transportation 424 747, 778-779, 96 1251, 1270-71, 47 444 (1976), provide discriminatees Dennison Los Angeles Department Water Power, 658 694, 695-696 1981); McCall Printing 633 1232, 1237 (CA6 1980). impossibility Impossibility doctrine W. Jaeger, Williston 1931-1979 (3d 1978). reasons stated text, revise implicit rejection defense. de novo, moreover, far clear available whose created condition impossibility. 1939, p. 50; Uniform Commercial Code 2-615(a) comment 10, 1A U.L.A. 335, 338 (1976); Lowenschuss Kane, 520 255, 265 1975). threshold matter, doubt ordered specific type injunctive relief. That court, "considering sought," F.Supp., 1187, "whether override agreement." Both counterclaim invoked Act. alleging VII, treated 917. generally Airline Stewards Stewardesses Assn. American Airlines, 573 960, 963 (CA7), 439 876, 99 214, 58 190 (1978) (judicial settlement trial). Consistent 917, remand permit individual meet forth occasion instead agreements, injunction. ambiguity, assume purposes constituted Economic necessity recognized commercial impracticability claim. 2-615, 4, 336 (1976) (increased cost constitute impossibility); 1931, 7-8 1978) (same). economic misfortune postpone forgo layoff plans, extant, conflicting, exposed followed. either course, reduction-in-force plans. way whatsoever injury. Prior requested stay Appeals. act final; most likely lay-offs occur all. stay, rule ask prospective justifiably relied right damages. Moreover, future negotiations, seek bargain allocating Compensatory injured 365, principle particularly applicable here; since employees' events giving rise ignorant illegality, recovery 180, a. issuance erroneous absence bond. Russell Farley, 105 433, 437, 1060 (1882); Buddy Systems, Inc. Exer-Genie, 545 1164, 1167-1168 1976), 903, 1694, 387 Enforcing compensate injuries suffered principle. Company; proof done all, see 12, supra, failing workforce fallen independent act, shifted thereby injury remedied

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