A-Rod’s Chances On Arbitration Appeal – Alex Rodriguez against the MLB – Rock, Meet Hill

My blog posts invariably cover business or consumer arbitration, but the arbitration award issued in the Alex Rodriguez (“A-Rod”) case gives me a chance to discuss labor arbitration.  In short there are three takeaways here: 1) labor arbitration is a different animal, but the scope of court review of arbitration awards is very limited, just as in business or consumer arbitrations; 2) A-Rod is pushing the proverbial rock up a hill with his announced intention to appeal Arbitrator Horowitz’s decision that he be suspended for 162 games (an entire season); and 3) there is a small window of opportunity that might allow him to play this year.

A Different Animal but the Same Very Limited Review

To begin with, labor arbitration is a bit different than consumer or business arbitration.  Whereas the latter arises out of an arbitration agreement between the parties, labor arbitrations typically arise out of a collective bargaining agreement (“CBA”) between a union and management.  So, in a typical labor arbitration, the case is union vs. management, with the union grieving on behalf of a union member (in this case the Players Association vs. MLB).  Another difference is that, whereas consumer or business arbitrations rarely have opinions, labor arbitrations typically do (it will be interesting to see if the A-Rod decision had an opinion).  But the end result is the same: labor arbitration awards are subject to very limited judicial review. 

Pushing a Rock up a Hill

The United States Supreme Court in the 1960s issued three decisions, called “The Steelworkers Trilogy,” that were very supportive of labor arbitration, and the finality of arbitration awards.  In one of the cases, United Steelworkers of America v. Enterprise Wheel & Car Corp., 363 U.S. 593 (1960), the Court stated, “The refusal of courts to review the merits of an arbitration award is the proper approach to arbitration under collective bargaining agreements. The federal policy of settling labor disputes by arbitration would be undermined if courts had the final say on the merits of the awards… [T]he question of interpretation of the collective bargaining agreement is a question for the arbitrator. It is the arbitrator’s construction which was bargained for; and so far as the arbitrator’s decision concerns construction of the contract, the courts have no business overruling him because their interpretation of the contract is different from his.”

So, what does this mean for A-Rod?  Basically, his intended appeal to federal district court is very likely to fail. Besides the language articulated above, the Court in the Enterprise case said that an arbitrator’s decision “is legitimate only so long as it draws its essence from the collective bargaining agreement.”  Given what we know of the CBA and the evidence presented to him, Arbitrator Horowitz’s decision would appear to be safe from A-Rod’s legal challenge.

A Very Slight Glimmer of Hope

Is there any hope for A-Rod?  No and yes.  As stated above, in my opinion he has virtually no chance of having the arbitration award vacated.  But that doesn’t mean there’s no hope for him to play this year.  How’s that?  He could petition the court to stay the arbitrator’s decision pending his appeal.  It’s a long shot and probably would not work.  To get a court to enjoin enforcement of the arbitration, A-Rod among other things would have to prove that there would be irreparable injury if the stay isn’t issued (a good argument at his age and condition; a lost season now essentially might end his career) and the likelihood of success on his appeal.  I think the latter argument would fail, based on the law discussed above.  Not only that, but as discussed previously in this blog, federal courts are growing impatient with frivolous appeals of arbitration decisions, and might issue sanctions against A-Rod and his attorneys if they bring what the court later finds to be a frivolous appeal of the arbitration award.  And, if by some chance A-Rod were to get a stay of the arbitrator’s decision pending his appeal, it’s entirely possible that the federal district court will rule on his appeal before the start of the baseball season this spring, or at least during the season, and as discussed above, he is likely to lose.

Bottom Line

My advice to A-Rod would be not to appeal the decision, but if past is prologue, I doubt that will be the case.

Note: besides being a Board Member of Arbitration Resolution Services, Inc., author George H. Friedman is an adjunct professor of law at Fordham Law School, where he has taught a course on arbitration since 1996.