Opinion ID: 405000
Heading Depth: 2
Heading Rank: 3

Heading: Repudiation of the Arbitral Process.

Text: 19 The parties' collective bargaining agreement specified arbitration as the preferred method of dispute resolution. As a result, we will not disturb an arbitration award except on the grounds of fraud, deceit, or breach of the duty of fair representation or unless the grievance procedure was a 'sham, substantially inadequate or substantially unavailable.'  Castaneda v. Dura-Vent Corp., 648 F.2d 612, 619 (9th Cir. 1981) (quoting Harris v. Chemical Leaman Tank Lines, 437 F.2d 167, 171 (5th Cir. 1971)). Fraud is also a ground for vacating an arbitral award under the Federal Arbitration Act. 9 U.S.C. § 10(a). Neither the Supreme Court nor this court has ever held the Federal Arbitration Act applicable to arbitration of labor disputes. See Textile Workers v. Lincoln Mills, 353 U.S. 448, 466-67, 77 S.Ct. 912, 926, 1 L.Ed.2d 972 (1957) (Frankfurter, J., dissenting); Local 1020, United Brotherhood of Carpenters v. FMC Corp., 658 F.2d 1285, 1289-90 (9th Cir. 1981); Local 13, ILWU v. Pacific Maritime Ass'n, 441 F.2d 1061, 1064-65 & n.5 (9th Cir. 1971), cert. denied, 404 U.S. 1016, 92 S.Ct. 677, 30 L.Ed.2d 664 (1972). Because fraud is a ground for vacating an arbitral award under either the Federal Arbitration Act or the federal common law fashioned from the policy of the national labor laws under the authorization of Textile Workers v. Lincoln Mills, 353 U.S. at 457, 77 S.Ct. at 918, we need not decide whether the Federal Arbitration Act governs labor arbitrations. See Local 1020, United Brotherhood of Carpenters v. FMC Corp., 658 F.2d at 1295; Service Employees Int'l Union, Local 36 v. Office Center Services, 670 F.2d 404, 406-08 & n.6 (3d Cir. 1982); General Warehousemen & Helpers Local 767 v. Standard Brands, Inc., 579 F.2d 1282, 1294 & n.9 (5th Cir. 1978) (en banc), cert. dismissed, 441 U.S. 957, 99 S.Ct. 2420, 60 L.Ed.2d 1075 (1979). 20 Obtaining an award by perjured testimony constitutes fraud. See Newark Stereotypers' Union No. 18 v. Newark Morning Ledger Co., 397 F.2d 594, 598 (3d Cir.) (dictum), cert. denied, 393 U.S. 954, 89 S.Ct. 378, 21 L.Ed.2d 365 (1968); Shearson Hayden Stone, Inc. v. Liang, 653 F.2d 310, 313 (7th Cir. 1981); Karppinen v. Karl Kiefer Machine Co., 187 F.2d 32, 34-35 (2d Cir. 1951) (assuming without deciding the question) (construing 9 U.S.C. § 10(a)). Accordingly, intentionally giving a false statement to union investigators causing them to drop the grievance until after it was time-barred also constitutes fraud. Congress anticipated that the contractual machinery would operate within some minimal levels of integrity. Hines v. Anchor Motor Freight, 424 U.S. 554, 571, 96 S.Ct. 1048, 1060, 47 L.Ed.2d 231 (1976). 21 Yet in order to protect the finality of arbitration decisions, courts must be slow to vacate an arbitral award on the ground of fraud. E.g., Newark Stereotypers' Union No. 18 v. Newark Morning Ledger Co., 397 F.2d at 598. The fraud must not have been discoverable upon the exercise of due diligence prior to the arbitration. Shearson Hayden Stone, Inc. v. Liang, 653 F.2d at 313. The fraud must materially relate to an issue in the arbitration. Id. The fraud must be established by clear and convincing evidence. See Karppinen v. Karl Kiefer Machine Co., 187 F.2d at 34. Compare England v. Doyle, 281 F.2d 304, 309-10 (9th Cir. 1960) (construing Fed.R.Civ.P. 60(b)); Wilson v. Thompson, 638 F.2d 801, 804 (5th Cir. 1981) (same). 22 The arbitrator ruled the grievance non-arbitrable because the union had dropped the grievance five months earlier. The district court found the union had dropped the grievance because of Martinez' lie. Hence, the fraud was material to laches-the only issue arbitrated. The parties did not argue, and the district court did not decide, whether the fraud was reasonably discoverable prior to the arbitration. And although the court found fraud, it did not state whether it had been proven by clear and convincing evidence. Accordingly, we must remand to the district court for further proceedings on these points. 23 Although courts have power to remand cases to an arbitration panel in certain circumstances under the Federal Arbitration Act, 9 U.S.C. §§ 10(e), 11, as well as under the federal common law governing labor arbitrations, see Hanford Atomic Metal Trades Council v. General Electric Co., 353 F.2d 302, 307-08 (9th Cir. 1965); UMW District No. 5 v. Consolidation Coal Co., 666 F.2d 806, 811 (3d Cir. 1981); Randall v. Lodge 1076, IAM, 648 F.2d 462, 468 (7th Cir. 1981), we need not decide whether ordinarily remand should be required upon the district court's finding that fraud vitiated the arbitral ruling. Remand would serve no purpose here. A finding of fraud by Safeway would necessarily imply Dogherra was wrongfully discharged, for both questions turn upon the same issue of fact-i.e., whether Dogherra timely informed Martinez that she was available for work. Therefore, should the district court find for Dogherra on the question of fraud, it must also enter judgment for her on the merits. 24