EASTERN ASSOCIATED COAL CORP. v. UNITED MINE WORKERS OF AMERICA, DISTRICT 17, et al.

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57 OCTOBER TERM, 2000
Syllabus
EASTERN ASSOCIATED COAL CORP. v. UNITED
MINE WORKERS OF AMERICA,
DISTRICT 17, et al.
certiorari to the united states court of appeals for
the fourth circuit
No. 99–1038. Argued October 2, 2000—Decided November 28, 2000
The arbitration provisions in petitioner Eastern Associated Coal Corp.’s
collective-bargaining agreement with respondent union specify, inter
alia, that Eastern must prove in binding arbitration that it has “just
cause” to discharge an employee, or else the arbitrator will order the
employee reinstated. James Smith worked for Eastern as a truck
driver subject to Department of Transportation (DOT) regulations re-
quiring random drug testing of workers engaged in “safety-sensitive”
tasks. After each of two occasions on which Smith tested positive for
marijuana, Eastern sought to discharge him. Each time, the union
went to arbitration, and the arbitrator concluded that the drug use did
not amount to “just cause” and ordered Smith’s reinstatement on certain
conditions. On the second occasion, Eastern filed suit to vacate the
arbitrator’s award. The District Court ordered the award’s enforce-
ment, holding that Smith’s conditional reinstatement did not violate the
strong regulation-based public policy against drug use by workers who
perform safety-sensitive functions. The Fourth Circuit affirmed.
Held: Public policy considerations do not require courts to refuse to
enforce an arbitration award ordering an employer to reinstate
an employee truck driver who twice tested positive for marijuana.
Pp. 61–67.
(a) The Court assumes that the collective-bargaining agreement itself
calls for Smith’s reinstatement, as the parties have granted the arbi-
trator authority to interpret the meaning of their contract’s language,
including such words as “just cause,” see Steelworkers v. Enterprise
Wheel & Car Corp., 363 U. S. 593, 599, and Eastern does not claim here
that the arbitrator acted outside the scope of his contractually delegated
authority, see, e. g., Paperworkers v. Misco, Inc., 484 U. S. 29, 38. Since
the award is not distinguishable from the contractual agreement, the
Court must decide whether a contractual reinstatement requirement
would fall within the legal exception that makes unenforceable “a col-
lective bargaining agreement that is contrary to public policy.” W. R.
Grace & Co. v. Rubber Workers, 461 U. S. 757, 766. Any such policy
must be “explicit,” “well defined,” and “dominant,” and it must be “as-

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58 EASTERN ASSOCIATED COAL CORP. v. MINE WORKERS
Syllabus
certained by reference to the laws and legal precedents, not from gen-
eral considerations of supposed public interests.” Ibid. The question
is not whether Smith’s drug use itself violates public policy, but whether
the agreement to reinstate him does so. Pp. 61–63.
(b) A contractual agreement to reinstate Smith with specified condi-
tions does not run contrary to public policy. The District Court cor-
rectly articulated the standard set out in W. R. Grace and Misco and
applied that standard to reach the right result. The public policy ex-
ception is narrow and must satisfy the principles set forth in those cases.
Moreover, where two political branches have created a detailed regula-
tory regime in a specific field, courts should approach with particular
caution pleas to divine further public policy in that area. Eastern as-
serts that a public policy against reinstatement of workers who use
drugs can be discerned from an examination of the Omnibus Transporta-
tion Employee Testing Act of 1991 and DOT’s implementing regulations.
However, these expressions of positive law embody not just policies
against drug use by employees in safety-sensitive transportation posi-
tions and in favor of drug testing, but also include a Testing Act policy
favoring rehabilitation of employees who use drugs. And the relevant
statutory and regulatory provisions must be read in light of background
labor law policy that favors determination of disciplinary questions
through arbitration when chosen as a result of labor-management ne-
gotiation. See, e. g., California Brewers Assn. v. Bryant, 444 U. S. 598,
608. The award here is not contrary to these several policies, taken
together, as it does not condone Smith’s conduct or ignore the risk to
public safety that drug use by truck drivers may pose, but punishes
Smith by placing conditions on his reinstatement. It violates no spe-
cific provision of any law or regulation, but is consistent with DOT rules
requiring completion of substance-abuse treatment before returning
to work and with the Act’s driving license suspension requirements and
its rehabilitative concerns. Moreover, the fact that Smith is a recidivist
is not sufficient to tip the balance in Eastern’s favor. Eastern’s argu-
ment that DOT’s withdrawal of a proposed “recidivist” rule leaves open
the possibility that discharge is the appropriate penalty for repeat of-
fenders fails because DOT based the withdrawal, not upon a determina-
tion that a more severe penalty was needed, but upon a determination
to leave in place other remedies. The Court cannot find in the Act, the
regulations, or any other law or legal precedent an explicit, well defined,
dominant public policy to which the arbitrator’s decision runs contrary.
Pp. 63–67.
188 F. 3d 501, affirmed.

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Opinion of the Court
Breyer, J., delivered the opinion of the Court, in which Rehnquist,
C. J., and Stevens, O’Connor, Kennedy, Souter, and Ginsburg, JJ.,
joined. Scalia, J., filed an opinion concurring in the judgment, in which
Thomas, J., joined, post, p. 67.
John G. Roberts, Jr., argued the cause for petitioner.
With him on the briefs were David G. Leitch, H. Christopher
Bartolomucci, Ronald E. Meisburg, Anna M. Dailey, and
Donna C. Kelly.
John R. Mooney argued the cause for respondents. With
him on the brief were Jonathan P. Hiatt, James B. Coppess,
Judith Rivlin, Charles F. Donnelly, and Laurence Gold.
Malcolm L. Stewart argued the cause for the United
States as amicus curiae urging affirmance. With him on
the brief were Solicitor General Waxman, Acting Assistant
Attorney General Ogden, Deputy Solicitor General Wallace,
William Kanter, Mark W. Pennak, Nancy E. McFadden,
Paul M. Geier, and Peter J. Plocki.*
Justice Breyer delivered the opinion of the Court.
A labor arbitrator ordered an employer to reinstate an em-
ployee truck driver who had twice tested positive for mari-
juana. The question before us is whether considerations
of public policy require courts to refuse to enforce that arbi-
tration award. We conclude that they do not. The courts
may enforce the award. And the employer must reinstate,
rather than discharge, the employee.
*Briefs of amici curiae urging reversal were filed for the Air Transport
Association of America et al. by John J. Gallagher and Neal D. Mollen;
for the Equal Employment Advisory Council by Robert E. Williams and
Ann Elizabeth Reesman; for Exxon Mobile Corp. by Walter E. Dellinger
and John F. Daum; and for the Institute for a Drug-Free Workplace by
Peter A. Susser.
Theodore J. St. Antoine, John Kagel, and David E. Feller filed a brief for
the National Academy of Arbitrators as amicus curiae urging affirmance.

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60 EASTERN ASSOCIATED COAL CORP. v. MINE WORKERS
Opinion of the Court
I
Petitioner, Eastern Associated Coal Corp., and respond-
ent, United Mine Workers of America, are parties to a
collective-bargaining agreement with arbitration provisions.
The agreement specifies that, in arbitration, in order to dis-
charge an employee, Eastern must prove it has “just cause.”
Otherwise the arbitrator will order the employee reinstated.
The arbitrator’s decision is final. App. 28–31.
James Smith worked for Eastern as a member of a road
crew, a job that required him to drive heavy trucklike vehi-
cles on public highways. As a truck driver, Smith was sub-
ject to Department of Transportation (DOT) regulations
requiring random drug testing of workers engaged in
“safety-sensitive” tasks. 49 CFR §§ 382.301, 382.305 (1999).
In March 1996, Smith tested positive for marijuana.
Eastern sought to discharge Smith. The union went to arbi-
tration, and the arbitrator concluded that Smith’s positive
drug test did not amount to “just cause” for discharge. In-
stead the arbitrator ordered Smith’s reinstatement, provided
that Smith (1) accept a suspension of 30 days without pay,
(2) participate in a substance-abuse program, and (3) undergo
drug tests at the discretion of Eastern (or an approved
substance-abuse professional) for the next five years.
Between April 1996 and January 1997, Smith passed
four random drug tests. But in July 1997 he again tested
positive for marijuana. Eastern again sought to discharge
Smith. The union again went to arbitration, and the arbi-
trator again concluded that Smith’s use of marijuana did not
amount to “just cause” for discharge, in light of two mitigat-
ing circumstances. First, Smith had been a good employee
for 17 years. App. to Pet. for Cert. 26a–27a. And, second,
Smith had made a credible and “very personal appeal under
oath . . . concerning a personal/family problem which caused
this one time lapse in drug usage.” Id., at 28a.
The arbitrator ordered Smith’s reinstatement provided
that Smith (1) accept a new suspension without pay, this time

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Opinion of the Court
for slightly more than three months; (2) reimburse Eastern
and the union for the costs of both arbitration proceedings;
(3) continue to participate in a substance-abuse program; (4)
continue to undergo random drug testing; and (5) provide
Eastern with a signed, undated letter of resignation, to take
effect if Smith again tested positive within the next five
years. Id., at 29a.
Eastern brought suit in federal court seeking to have the
arbitrator’s award vacated, arguing that the award contra-
vened a public policy against the operation of dangerous ma-
chinery by workers who test positive for drugs. 66 F. Supp.
2d 796 (SDWV 1998). The District Court, while recognizing
a strong regulation-based public policy against drug use by
workers who perform safety-sensitive functions, held that
Smith’s conditional reinstatement did not violate that policy.
Id., at 804–805. And it ordered the award’s enforcement.
Id., at 805.
The Court of Appeals for the Fourth Circuit affirmed on
the reasoning of the District Court. 188 F. 3d 501, 1999 WL
635632 (1999) (unpublished). We granted certiorari in light
of disagreement among the Circuits. Compare id., at **1
(holding that public policy does not prohibit “reinstatement
of employees who have used illegal drugs in the past”), with,
e. g., Exxon Corp. v. Esso Workers’ Union, Inc., 118 F. 3d
841, 852 (CA1 1997) (holding that public policy prohibits en-
forcement of a similar arbitration award). We now affirm
the Fourth Circuit’s determination.
II
Eastern claims that considerations of public policy make
the arbitration award unenforceable. In considering this
claim, we must assume that the collective-bargaining agree-
ment itself calls for Smith’s reinstatement. That is because
both employer and union have granted to the arbitrator the
authority to interpret the meaning of their contract’s lan-
guage, including such words as “just cause.” See Steelwork-

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62 EASTERN ASSOCIATED COAL CORP. v. MINE WORKERS
Opinion of the Court
ers v. Enterprise Wheel & Car Corp., 363 U. S. 593, 599
(1960). They have “bargained for” the “arbitrator’s con-
struction” of their agreement. Ibid. And courts will set
aside the arbitrator’s interpretation of what their agreement
means only in rare instances. Id., at 596. Of course, an ar-
bitrator’s award “must draw its essence from the contract
and cannot simply reflect the arbitrator’s own notions of in-
dustrial justice.” Paperworkers v. Misco, Inc., 484 U. S. 29,
38 (1987). “But as long as [an honest] arbitrator is even ar-
guably construing or applying the contract and acting within
the scope of his authority,” the fact that “a court is convinced
he committed serious error does not suffice to overturn his
decision.” Ibid.; see also Enterprise Wheel, supra, at 596
(the “proper” judicial approach to a labor arbitration award
is to “refus[e] . . . to review the merits”). Eastern does not
claim here that the arbitrator acted outside the scope of his
contractually delegated authority. Hence we must treat the
arbitrator’s award as if it represented an agreement between
Eastern and the union as to the proper meaning of the con-
tract’s words “just cause.” See St. Antoine, Judicial Review
of Labor Arbitration Awards: A Second Look at Enterprise
Wheel and Its Progeny, 75 Mich. L. Rev. 1137, 1155 (1977).
For present purposes, the award is not distinguishable from
the contractual agreement.
We must then decide whether a contractual reinstatement
requirement would fall within the legal exception that makes
unenforceable “a collective-bargaining agreement that is con-
trary to public policy.” W. R. Grace & Co. v. Rubber Work-
ers, 461 U. S. 757, 766 (1983). The Court has made clear that
any such public policy must be “explicit,” “well defined,” and
“dominant.” Ibid. It must be “ascertained ‘by reference
to the laws and legal precedents and not from general con-
siderations of supposed public interests.’ ” Ibid. (quoting
Muschany v. United States, 324 U. S. 49, 66 (1945)); accord,
Misco, supra, at 43. And, of course, the question to be an-
swered is not whether Smith’s drug use itself violates public

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policy, but whether the agreement to reinstate him does so.
To put the question more specifically, does a contractual
agreement to reinstate Smith with specified conditions, see
App. to Pet. for Cert. 29a, run contrary to an explicit, well-
defined, and dominant public policy, as ascertained by refer-
ence to positive law and not from general considerations of
supposed public interests? See Misco, supra, at 43.
III
Eastern initially argues that the District Court erred by
asking, not whether the award is “contrary to” public policy
“as ascertained by reference” to positive law, but whether
the award “violates” positive law, a standard Eastern says is
too narrow. We believe, however, that the District Court
correctly articulated the standard set out in W. R. Grace and
Misco, see 66 F. Supp. 2d, at 803 (quoting Misco, supra, at
43), and applied that standard to reach the right result.
We agree, in principle, that courts’ authority to invoke the
public policy exception is not limited solely to instances
where the arbitration award itself violates positive law.
Nevertheless, the public policy exception is narrow and must
satisfy the principles set forth in W. R. Grace and Misco.
Moreover, in a case like the one before us, where two politi-
cal branches have created a detailed regulatory regime in a
specific field, courts should approach with particular caution
pleas to divine further public policy in that area.
Eastern asserts that a public policy against reinstatement
of workers who use drugs can be discerned from an examina-
tion of that regulatory regime, which consists of the Omnibus
Transportation Employee Testing Act of 1991 and DOT’s im-
plementing regulations. The Testing Act embodies a con-
gressional finding that “the greatest efforts must be ex-
pended to eliminate the . . . use of illegal drugs, whether on
or off duty, by those individuals who are involved in [certain
safety-sensitive positions, including] the operation of . . .
trucks.” Pub. L. 102–143, § 2(3), 105 Stat. 953. The Act

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64 EASTERN ASSOCIATED COAL CORP. v. MINE WORKERS
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adds that “increased testing” is the “most effective deter-
rent” to “use of illegal drugs.” § 2(5). It requires the
Secretary of Transportation to promulgate regulations
requiring “testing of operators of commercial motor vehi-
cles for the use of a controlled substance.” 49 U. S. C.
§ 31306(b)(1)(A) (1994 ed., Supp. III). It mandates suspen-
sion of those operators who have driven a commercial motor
vehicle while under the influence of drugs. 49 U. S. C.
§ 31310(b)(1)(A) (requiring suspension of at least one year for
a first offense); § 31310(c)(2) (requiring suspension of at least
10 years for a second offense). And DOT’s implementing
regulations set forth sanctions applicable to those who test
positive for illegal drugs. 49 CFR § 382.605 (1999).
In Eastern’s view, these provisions embody a strong public
policy against drug use by transportation workers in safety-
sensitive positions and in favor of random drug testing in
order to detect that use. Eastern argues that reinstatement
of a driver who has twice failed random drug tests would
undermine that policy—to the point where a judge must set
aside an employer-union agreement requiring reinstatement.
Eastern’s argument, however, loses much of its force when
one considers further provisions of the Act that make clear
that the Act’s remedial aims are complex. The Act says that
“rehabilitation is a critical component of any testing pro-
gram,” § 2(7), 105 Stat. 953, that rehabilitation “should be
made available to individuals, as appropriate,” ibid., and
that DOT must promulgate regulations for “rehabilitation
programs,” 49 U. S. C. § 31306(e). The DOT regulations
specifically state that a driver who has tested positive for
drugs cannot return to a safety-sensitive position until (1)
the driver has been evaluated by a “substance abuse pro-
fessional” to determine if treatment is needed, 49 CFR
§ 382.605(b) (1999); (2) the substance-abuse professional has
certified that the driver has followed any rehabilitation
program prescribed, § 382.605(c)(2)(i); and (3) the driver has
passed a return-to-duty drug test, § 382.605(c)(1). In addi-

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Opinion of the Court
tion, (4) the driver must be subject to at least six random
drug tests during the first year after returning to the job.
§ 382.605(c)(2)(ii). Neither the Act nor the regulations for-
bid an employer to reinstate in a safety-sensitive position an
employee who fails a random drug test once or twice. The
congressional and regulatory directives require only that the
above-stated prerequisites to reinstatement be met.
Moreover, when promulgating these regulations, DOT de-
cided not to require employers either to provide rehabilita-
tion or to “hold a job open for a driver” who has tested posi-
tive, on the basis that such decisions “should be left to
management/driver negotiation.” 59 Fed. Reg. 7502 (1994).
That determination reflects basic background labor law
principles, which caution against interference with labor-
management agreements about appropriate employee disci-
pline. See, e. g., California Brewers Assn. v. Bryant, 444
U. S. 598, 608 (1980) (noting that it is “this Nation’s long-
standing labor policy” to give “employers and employees the
freedom through collective bargaining to establish conditions
of employment”).
We believe that these expressions of positive law embody
several relevant policies. As Eastern points out, these poli-
cies include Testing Act policies against drug use by employ-
ees in safety-sensitive transportation positions and in favor
of drug testing. They also include a Testing Act policy fa-
voring rehabilitation of employees who use drugs. And the
relevant statutory and regulatory provisions must be read
in light of background labor law policy that favors determi-
nation of disciplinary questions through arbitration when
chosen as a result of labor-management negotiation.
The award before us is not contrary to these several poli-
cies, taken together. The award does not condone Smith’s
conduct or ignore the risk to public safety that drug use by
truck drivers may pose. Rather, the award punishes Smith
by suspending him for three months, thereby depriving him
of nearly $9,000 in lost wages, Record Doc. 29, App. A, p. 2;

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66 EASTERN ASSOCIATED COAL CORP. v. MINE WORKERS
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it requires him to pay the arbitration costs of both sides; it
insists upon further substance-abuse treatment and testing;
and it makes clear (by requiring Smith to provide a signed
letter of resignation) that one more failed test means
discharge.
The award violates no specific provision of any law or reg-
ulation. It is consistent with DOT rules requiring comple-
tion of substance-abuse treatment before returning to work,
see 49 CFR § 382.605(c)(2)(i) (1999), for it does not preclude
Eastern from assigning Smith to a non-safety-sensitive posi-
tion until Smith completes the prescribed treatment pro-
gram. It is consistent with the Testing Act’s 1-year and
10-year driving license suspension requirements, for those
requirements apply only to drivers who, unlike Smith, actu-
ally operated vehicles under the influence of drugs. See 49
U. S. C. §§ 31310(b), (c). The award is also consistent with
the Act’s rehabilitative concerns, for it requires substance-
abuse treatment and testing before Smith can return to
work.
The fact that Smith is a recidivist—that he has failed drug
tests twice—is not sufficient to tip the balance in Eastern’s
favor. The award punishes Smith more severely for his sec-
ond lapse. And that more severe punishment, which in-
cluded a 90-day suspension, would have satisfied even a “re-
cidivist” rule that DOT once proposed but did not adopt—a
rule that would have punished two failed drug tests, not with
discharge, but with a driving suspension of 60 days. 57 Fed.
Reg. 59585 (1992). Eastern argues that DOT’s withdrawal
of its proposed rule leaves open the possibility that discharge
is the appropriate penalty for repeat offenders. That argu-
ment fails, however, because DOT based its withdrawal, not
upon a determination that a more severe penalty was
needed, but upon a determination to leave in place, as the
“only driving prohibition period for a controlled substances
violation,” the “completion of rehabilitation requirements

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Scalia, J., concurring in judgment
and a return-to-duty test with a negative result.” 59 Fed.
Reg. 7493 (1994).
Regarding drug use by persons in safety-sensitive posi-
tions, then, Congress has enacted a detailed statute. And
Congress has delegated to the Secretary of Transporta-
tion authority to issue further detailed regulations on that
subject. Upon careful consideration, including public notice
and comment, the Secretary has done so. Neither Congress
nor the Secretary has seen fit to mandate the discharge of
a worker who twice tests positive for drugs. We hesitate
to infer a public policy in this area that goes beyond the
careful and detailed scheme Congress and the Secretary
have created.
We recognize that reasonable people can differ as to
whether reinstatement or discharge is the more appro-
priate remedy here. But both employer and union have
agreed to entrust this remedial decision to an arbitrator.
We cannot find in the Act, the regulations, or any other law
or legal precedent an “explicit,” “well defined,” “dominant”
public policy to which the arbitrator’s decision “runs con-
trary.” Misco, 484 U. S., at 43; W. R. Grace, 461 U. S., at
766. We conclude that the lower courts correctly rejected
Eastern’s public policy claim. The judgment of the Court
of Appeals is
Affirmed.
Justice Scalia, with whom Justice Thomas joins,
concurring in the judgment.
I concur in the Court’s judgment, because I agree that no
public policy prevents the reinstatement of James Smith to
his position as a truck driver, so long as he complies with
the arbitrator’s decision, and with those requirements set out
in the Department of Transportation’s regulations. I do not
endorse, however, the Court’s statement that “[w]e agree, in
principle, that courts’ authority to invoke the public policy
exception is not limited solely to instances where the arbitra-

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68 EASTERN ASSOCIATED COAL CORP. v. MINE WORKERS
Scalia, J., concurring in judgment
tion award itself violates positive law.” Ante, at 63. No
case is cited to support that proposition, and none could be.
There is not a single decision, since this Court washed its
hands of general common-lawmaking authority, see Erie
R. Co. v. Tompkins, 304 U. S. 64 (1938), in which we have
refused to enforce on “public policy” grounds an agreement
that did not violate, or provide for the violation of, some
positive law. See, e. g., Hurd v. Hodge, 334 U. S. 24 (1948)
(refusing to enforce under the public policy doctrine a re-
strictive covenant that violated Rev. Stat. § 1978, 42 U. S. C.
§ 1982).
After its dictum opening the door to flaccid public policy
arguments of the sort presented by petitioner here, the
Court immediately posts a giant “Do Not Enter” sign.
“[T]he public policy exception,” it says, “is narrow and must
satisfy the principles set forth in W. R. Grace,” ante, at 63,
which require that the applicable public policy be “explicit,”
“well defined,” “dominant,” and “ascertained ‘by reference
to the laws and legal precedents and not from general con-
siderations of supposed public interests,’ ” W. R. Grace &
Co. v. Rubber Workers, 461 U. S. 757, 766 (1983) (quoting
Muschany v. United States, 324 U. S. 49, 66 (1945)). It is
hard to imagine how an arbitration award could violate a
public policy, identified in this fashion, without actually con-
flicting with positive law. If such an award could ever exist,
it would surely be so rare that the benefit of preserving
the courts’ ability to deal with it is far outweighed by the
confusion and uncertainty, and hence the obstructive liti-
gation, that the Court’s Delphic “agree[ment] in principle”
will engender.
The problem with judicial intuition of a public policy that
goes beyond the actual prohibitions of the law is that there
is no way of knowing whether the apparent gaps in the law
are intentional or inadvertent. The final form of a statute
or regulation, especially in the regulated fields where the
public policy doctrine is likely to rear its head, is often the

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Scalia, J., concurring in judgment
result of compromise among various interest groups, result-
ing in a decision to go so far and no farther. One can, of
course, summon up a parade of horribles, such as an arbitra-
tion award ordering an airline to reinstate an alcoholic pilot
who somehow escapes being grounded by force of law. But
it seems to me we set our face against judicial correction of
the omissions of the political branches when we declined the
power to define common-law offenses. See United States v.
Hudson, 7 Cranch 32 (1812). Surely the power to invalidate
a contract providing for actions that are not contrary to law
(but “ought” to be) is less important to the public welfare
than the power to prohibit harmful acts that are not contrary
to law (but “ought” to be). And it is also less efficacious,
since it depends upon the willingness of one of the parties to
the contract to assert the public policy interest. (If the air-
line is not terribly concerned about reinstating an alcoholic
pilot, the courts will have no opportunity to prevent the re-
instatement.) The horribles that can be imagined—if they
are really so horrible and ever come to pass—can readily
be corrected by Congress or the agency, with no problem
of retroactivity. Supervening law is always grounds for the
dissolution of a contractual obligation. See Restatement
(Second) of Contracts § 264 (1979).
In sum, it seems to me that the game set in play by the
Court’s dictum endorsing “in principle” the power of federal
courts to enunciate public policy is not worth the candle.
Agreeing with the reasoning of the Court except insofar as
this principle is concerned, I concur only in the judgment.