Opinion ID: 469049
Heading Depth: 2
Heading Rank: 2

Heading: The Public Policy Argument

Text: 9 The Postal Service argues that, even if the arbitrator's award drew its essence from the contract, that decision must be overturned because it is contrary to a well-defined public policy of federal supremacy or preemption, under which the Postal Service's operations are not to be subjected to a patchwork of conflicting state laws. The Postal Service relies on the so-called public policy exception derived from W.R. Grace, 461 U.S. at 766, 103 S.Ct. at 2184, under which a court can vacate an arbitration award which compels conduct contrary to a well-defined public policy. In American Postal Workers, this court rejected an invitation to invoke the public policy exception, finding that the exception is designed to be narrow so as to limit potentially intrusive judicial review of arbitration awards under the guise of 'public policy.'  789 F.2d at 8. We find that this narrow exception is not implicated by the facts of this case. 10 The arbitrator's decision does not threaten to impair postal operations by subjecting the Postal Service to the dictates of all state and local laws. It applies one Tennessee statute to a small class of employees at one post office; it has no precedential value as an interpretation of the management rights clause. Further, the Postal Service concedes that the public policy of federal supremacy does not preclude it from agreeing to subject itself to the Tennessee law, but claims that it never made any such agreement here. We have, however, upheld the arbitrator's reading of the contract to embody an agreement by the Jackson Post Office to pay flexible employees for serving on jury duty in accordance with Tennessee law. Because the contract has been interpreted by the arbitrator to include an agreement by the Postal Service to comply with this particular statute as applicable law, any public policy against compelling the Postal Service to obey such laws is inapposite. Thus, while we acknowledge the validity of the government's concern over the public policy ramifications of allowing Postal Service operations to be impaired by conflicting state and local laws, we conclude that this policy is not implicated in the unique circumstances of this case.