Title Exxon Shipping Company v. Exxon Seamen's Union
Date 1993
By Alito
Subject Misc
Contents
Page 1
LEXSEE 11 F3D 1189
EXXON SHIPPING COMPANY, A Delaware Corporation, Appellee v. EXXON SEAMEN'S UNION, Appellant
No. 92-5489
UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT
11 F.3d 1189; 1993 U.S. App. LEXIS 31688; 144 L.R.R.M. 2955; 127 Lab. Cas. (CCH) P10,956
May 19, 1993, Argued
December 8, 1993, Filed
SUBSEQUENT HISTORY: **1
Petition for Rehearing Denied March 9, 1994, Reported at: 1994 U.S. App. LEXIS 4385.
PRIOR HISTORY:
ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY. D.C. Civil No. 92-00392.
CASE SUMMARY:
PROCEDURAL POSTURE: The United States District Court for the District of New Jersey vacated the arbitra- tion award that required appellee shipping company to reinstate an able bodied seaman to his position on an oil tanker. The seaman had been discharged because he was found to be highly intoxicated while on duty. Appellant union sought review.
OVERVIEW: An able bodied seaman was discharged because a breathalyzer test revealed that he had a blood alcohol content that was three times the maximum permit- ted by the Coast Guard regulations. The arbitration panel concluded that the discharge had not been for good cause and that the shipping company's policy did not require that result. The shipping company filed an action in the district court, and the award was vacated. On appeal, the court affirmed and held that the award violated a public policy that was both well defined and dominant. The court concluded that the shipping company, as the owner and operator of an oil tanker, could not have been compelled to reinstate to a "safety-sensitive" position the seaman who had been found to be intoxicated while on duty. The court observed that Congress had focused specifically on the risk that such spills could be caused by oil tanker per- sonnel who were under the influence of alcohol or drugs. While the federal labor laws embodied a strong policy fa-
voring the settlement of labor disputes by arbitration, that policy was required to yield to the public policy favor- ing measures designed to avert potentially catastrophic oil spills.
OUTCOME: The court affirmed the judgment that va- cated the arbitration award. The court held that although the shipping company's policy did not require the shipping company to discharge an able bodied seaman, who was found to be intoxicated while on duty, it could not be com- pelled to reinstate the seaman to a "safety-sensitive" po- sition. Public policy favoring measures designed to avoid oil spills overrode public policy favoring arbitration.
LexisNexis(R) Headnotes
Admiralty Law > Personal Injuries > Maritime Tort Law
HN1 Able bodied seamen have duties that are related to the safe operation of the ship. 33 C.F.R. § 95.015 (1993);
46 C.F.R. § 12.05-9 (1992).
Labor & Employment Law > Collective Bargaining & Labor Relations > Enforcement
HN2 As with any contract, a court may not enforce a collective-bargaining agreement that is contrary to public policy. However, such a public policy must be well de- fined and dominant and is to be ascertained by reference to the laws and legal precedents and not from general considerations of supposed public interests.
Civil Procedure > Alternative Dispute Resolution > Judicial Review
HN3 An arbitration award may properly be vacated ei- ther because it violates a specific command of some law or because of inconsistency with public policy.
Civil Procedure > Alternative Dispute Resolution > Judicial Review
HN4 An arbitration award may be vacated if upholding it would amount to "judicial condonation" of illegal acts.
11 F.3d 1189, *; 1993 U.S. App. LEXIS 31688, **1;
144 L.R.R.M. 2955; 127 Lab. Cas. (CCH) P10,956
Page 2
Environmental Law > Litigation & Administrative
Proceedings > Negligence
Environmental Law > Litigation & Administrative
Proceedings > Cleanup Costs
HN5 Under the Clean Water Act (CWA), specifically
33 U.S.C.S. § 1321(f), the owner or operator of an oil tanker that causes a spill is liable for the costs of removal. Similarly, under the Oil Pollution Act of 1990 (OPA), specifically 33 U.S.C.S. § 2702, an owner or operator may be liable for, among other things, removal costs, injury to natural resources, loss of the use of natural resources for subsistence, injury to real or personal property, loss of taxes by a government unit, loss of profits and earn- ing capacity, and any increase in the cost of providing public services during removal. While there are limits on liability under both the CWA and the OPA, these limits do not apply if the spill was caused by gross negligence, willful misconduct, or, under the OPA, the violation of an applicable federal regulation. 33 U.S.C.S. §§ 1321(f)(1),
2704(c). The CWA also provides for substantial civil and administrative penalties. 33 U.S.C.S. § 1319(d), (g). Admiralty Law > Personal Injuries > Maritime Tort Law Labor & Employment Law > Employee Privacy > Drug
& Alcohol Testing
HN6 The Coast Guard has promulgated regulations per- mitting a marine employer to require crew members on commercial vessels to undergo a chemical test for alcohol or drugs when the crew member is involved in an accident or is suspected of being intoxicated. 33 C.F.R. § 95.035
(1993). A crew member who is intoxicated while on duty is guilty of a crime and is liable for a civil penalty. 33
C.F.R. § 95.055 (1993). Marine employers are prohibited from allowing an intoxicated individual to stand watch or perform other duties, 33 C.F.R. § 95.050(b) (1993), and must exercise "due diligence" to see that the regula- tions concerning intoxication are not violated, 33 C.F.R.
§ 95.050(a) (1993).
Transportation Law > Water Transportation > Maintenance & Safety
Labor & Employment Law > Employment Relationships
> Employees
HN7 A person lacking a valid merchant mariner's doc- ument may not be employed as an able bodied seaman
46 U.S.C.S. § 8701(b), and such a document may be sus- pended or revoked for, among other things, violating a law or regulation intended to promote marine safety or to protect navigable waters, an act of misconduct or negli- gence while on duty, or a conviction within the prior three years for operating a motor vehicle under the influence of alcohol and certain other similar offenses. 46 U.S.C.S. §
7703.
Transportation Law > Water Transportation >
Maintenance & Safety
HN8 Under 46 U.S.C.S. § 8701(b), it is unlawful to engage or employ an individual to serve on board a cov- ered vessel if the individual lacks a merchant mariner's document.
Transportation Law > Water Transportation > Maintenance & Safety
HN9 Under 46 U.S.C. § 8701(d), a person including an individual violating 46 U.S.C.S. § 8701(b) is liable to the United States Government for a civil penalty of $500.
COUNSEL: SCHNEIDER, GOLDBERGER, COHEN, FINN, SOLOMON, MICELI, LEDER & MONTALBANO, A Professional Corporation, 1150
Raritan Road, Cranford, New Jersey 07016, On the Brief: HOWARD A. GOLDBERGER, ESQ. (Argued), Attorneys for Appellant.
JOHN F. TULLY, ESQ., JOSEPH T. WALSH III, ESQ., DOUGLAS B. NEAGLI, ESQ. (Argued), Exxon Company U.S.A. 1400 Park Avenue, Linden, New Jersey
07036, Attorneys for Appellee.
JUDGES: Before: STAPLETON, ALITO and SEITZ, Circuit Judges.
OPINIONBY: ALITO
OPINION: *1190 OPINION OF THE COURT
ALITO, Circuit Judge:
The Exxon Seamen's Union has appealed from a dis- trict court order vacating an arbitration award that required the Exxon Shipping Company to reinstate an able bodied seaman on an oil tanker who was found to be highly in- toxicated while on duty. The district court held that this arbitration award was contrary to the well defined and dominant public policy against having intoxicated per- sons participate in the operation of commercial vessels. After the district court entered the order at issue here, we upheld a similar district court order vacating an ar- bitration award that required the reinstatement **2 of an able bodied seaman on another oil tanker who had failed a company drug test. Exxon Shipping Co. v. Exxon Seamen's Union, 993 F.2d 357 (3d Cir. 1993) ("Exxon Shipping Co. I") In light of that decision, we affirm the order now before us.
I.
In 1985, the Exxon Shipping Company and the Exxon Seamen's Union entered into a collective bargaining agreement that required the arbitration of grievances and provided that the decision of an arbitration panel would
11 F.3d 1189, *1190; 1993 U.S. App. LEXIS 31688, **2;
144 L.R.R.M. 2955; 127 Lab. Cas. (CCH) P10,956
Page 3
be final and binding. In April 1988, after bargaining to an impasse, Exxon Shipping announced that it was imple- menting certain modifications of this agreement, includ- ing a new policy on employee alcohol and drug use. This
**4
and arbitration procedure."
policy stated that "being unfit for work because of use of drugs, or alcohol is strictly prohibited and is grounds for termination of employment." The policy also provided that Exxon Shipping had the "right to require employees to submit to medical evaluation or alcohol and drug test- ing where cause exists to suspect alcohol or drug misuse." n1
n1 The policy also encouraged employees suf- fering from alcohol or drug dependency to seek advice and treatment, and the policy stated that no employee would be terminated or otherwise disci- plined for seeking such help.
**3
In September 1988, Exxon Shipping sent a letter to all of its oceangoing employees further explaining its alcohol and drug policy. This letter stated that it served as "another official notice that violation of the Company Alcohol and Drug Use Policy, or regulations governing alcohol or drug use in the work place will result in immediate termina- tion from the vessel." The letter added: "While we must continue to thoroughly investigate the facts of each indi- vidual case and make a final determination on a case-by-- case basis, termination of employment is the penalty for violation of these standards."
Approximately one year later, on September 5,
1989, Exxon Shipping and the union entered into a Memorandum of Understanding modifying the collective bargaining agreement. This Memorandum provided:
A breathalyzer test may be given "for cause" by a supervisor trained to conduct such tests to anyone suspected of intoxication. A .04 or above Blood Alcohol Content (BAC)is con- sidered intoxication and may result in dis- charge from the vessel and subject the em- ployee to further discipline up to and includ- ing termination. n2
n2 This Memorandum of Understanding pro- vided for different treatment of employees who failed drug tests. The Memorandum stated that if an employee failed a properly administered drug test and did not present to the union any other test result establishing that he or she was drug-free, the union would "accept the offense as grounds for termination which is not subject to the grievance
On September 13, 1989, shortly after this memoran- dum was signed, the Exxon Long Beach, a 987-foot oil tanker used to transport crude oil from Alaska to California, was anchored at San Francisco. One of the able bodied seamen assigned to this ship was Randall Fris.
HN1 Able bodied seamen have duties that are related to the safe operation of the ship. See 33 C.F.R. § 95.015
(1993); 46 C.F.R. § 12.05-9 (1992). At about midnight, Fris returned to the ship and reported for duty. n3 Several officers who observed him *1191 believed that he was in an impaired condition. A breathalyzer test was admin- istered, n4 and the test revealed a blood alcohol content of
0.150, more than three times the maximum (0.04) permit- ted by the Memorandum of Understanding and by Coast Guard regulations. See 33 C.F.R. §§ 95.020(b), 95.050(b),
95.055 (1993). The next day, Exxon Shipping discharged
Fris.
n3 Although the vessel was anchored at this time, the district court stated that "Fris nevertheless had obligations and responsibilities which required the exercise of judgment." Dist. Ct. Op. at 34.
n4 This test was authorized by the provision of the Memorandum of Understanding quoted above and by 33 C.F.R. § 95.035(a)(2) (1993).
**5
The union filed a grievance protesting Fris's discharge, and eventually the dispute was submitted to a three- member arbitration panel consisting of a neutral arbitrator and representatives of the company and the union. Over the dissent of the company representative, the panel con- cluded that Fris's discharge had not been for good cause. The majority agreed that Fris had been intoxicated when he boarded the Exxon Long Beach, but it concluded that the Memorandum of Understanding and the company's al- cohol policy, while permitting discharge for such conduct, did not require that result. Relying on Fris's good record during his eight years of employment by Exxon Shipping, the majority concluded that discharge was not the appro- priate remedy. The majority stated that "such an employee should have been given an opportunity to demonstrate that the events on September 13, 1989 were an aberration, and that they would not occur again." App. at 50. The major- ity determined that the appropriate penalty was a 90-day suspension and directed Exxon Shipping to reinstate Fris to his prior position with back pay. The award did not re- quire Fris to undergo any type of rehabilitation, treatment, or counselling. **6
11 F.3d 1189, *1191; 1993 U.S. App. LEXIS 31688, **6;
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Page 4
Exxon Shipping then filed this action in the United States District Court for the District of New Jersey, seek- ing to have the arbitration award vacated. The district court granted summary judgment for Exxon Shipping, concluding that the award was contrary to "a well defined and dominant public policy against having intoxicated persons operate commercial vessels." Dist. Ct. Op. at 25. The court relied on a Coast Guard regulation prohibiting the operation of a vessel while intoxicated, as well as "a myriad of regulations from various Government agencies concerning alcohol and drug use in the workplace." Id. at 26. Noting that Fris "was not a desk-bound employee" but had "significant responsibilities for the operation of a large, ocean-going oil tanker," the court stated: "With an excess of three to four times the blood alcohol permitted by Exxon and the Coast Guard, Fris would be hard pressed to exercise the judgment and discretion required even on a moored oil tanker." Id. at 34-35. The court added that if Fris were involved in an accident while intoxicated,
"Exxon would be hard put to explain or justify his em- ployment." Id. at 35. The court observed that "there is no margin **7 for error in the operation of an oil tanker." Id. at 36. The court continued: "A mistake is usually catastrophic in terms of loss of life, damage to the envi- ronment, or destruction of property. A mistake caused by or clouded by an excessive level of alcohol in the system of a worker is simply unacceptable." Id.
After the district court entered its order vacating the arbitration award, the union took this appeal.
II.
In W.R. Grace & Co. v. Local Union 759, Int'l Union of the United Rubber Workers of America, 461 U.S. 757,
766, 76 L. Ed. 2d 298, 103 S. Ct. 2177 (1983), the Supreme Court stated that HN2 "as with any contract, . . . a court may not enforce a collective-bargaining agreement that is contrary to public policy." The Court cautioned, however, that "such a public policy . . . must be well defined and dominant, and is to be ascertained 'by reference to the laws and legal precedents and not from general considerations of supposed public interests.'" Id. (quoting Muschany v. United States, 324 U.S. 49, 66, 89 L. Ed. 744, 65 S. Ct.
442 (1945)).
Several years later, in United Paperworkers Int'l v. Misco, Inc., 484 U.S. 29, 36, 98 L. Ed. 2d 286, 108 S. Ct. 364 (1987), a union **8 argued that "an arbitral award may not be set aside on public policy *1192 grounds unless the award orders conduct that violates the positive law." The Court found it unnecessary to reach this argument, however, because the Court found that the court of appeals decision under review did not comply with the minimum standards set out in W.R. Grace & Co. See Misco, 484 U.S. at 45 n.12.
Misco involved an employee who operated a machine that used sharp blades to cut rolls of paper. The employee was found in the backseat of a car in the company park- ing lot "with marijuana smoke in the air and a lighted marijuana cigarette in the frontseat ashtray." Id. at 33. In addition, marijuana gleanings were discovered in the employee's car, and marijuana was found in his home. Id. After learning these facts, the company discharged him, but an arbitrator ordered his reinstatement. The dis- trict court, however, refused to enforce the award, and the court of appeals affirmed, holding that reinstatement would violate the public policy "against the operation of dangerous machinery by persons under the influence of drugs or alcohol." 768 F.2d 739, 743 (5th Cir. 1985).
**9 The Supreme Court reversed, stating that the court of appeals had "made no attempt to review existing laws and legal precedents in order to demonstrate that they es- tablish a 'well-defined and dominant' policy against the operation of dangerous machinery while under the influ- ence of drugs." Misco, 484 U.S. at 44. The Court also stated that even if the court of appeals' formulation of public policy were accepted, "no violation of that pol- icy had been clearly shown" in that case because there was insufficient evidence that the employee would have operated his machine under the influence of drugs. Id. While Misco left open the question whether an arbi- tration award may be set aside on public policy grounds only when enforcement of the award would violate pos- itive law, two recent decisions of our court have explic- itly or implicitly rejected that argument. In Stroehmann Bakeries v. Local 776, Int'l Bhd. of Teamsters, 969 F.2d
1436 (3d Cir.), cert. denied, 121 L. Ed. 2d 585, 113 S. Ct. 660 (1992), the employer discharged a deliveryman after determining that he had sexually harassed a cus- tomer's employee, but **10 an arbitrator ordered the deliveryman's reinstatement. The arbitrator did not de- cide whether sexual harassment had actually occurred, but the arbitrator concluded that the employer had not made an adequate investigation. The district court vacated the award, and we affirmed. Looking to Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-2(a)(1) (1988), an Equal Employment Opportunity Commission regulation,
19 C.F.R. § 1604.11(a) (1993), the Supreme Court's de- cision in Meritor Sav. Bank v. Vinson, 477 U.S. 57, 64-
67, 91 L. Ed. 2d 49, 106 S. Ct. 2399 (1986), and other authorities, we found that "there is a well-defined and dominant public policy concerning sexual harassment in the workplace." Stroehmann Bakeries, c 969 F.2d at 1441-
42. We also found that there is a "well-defined, dominant public policy favoring voluntary employer prevention and application of sanctions against sexual harassment in the workplace." 969 F.2d at 1442. We then held that "an award which fully reinstates an employee accused of sexual ha-
11 F.3d 1189, *1192; 1993 U.S. App. LEXIS 31688, **10;
144 L.R.R.M. 2955; 127 Lab. Cas. (CCH) P10,956
Page 5
rassment without a determination that the harassment did not occur violates **11 public policy." Id. We reached this conclusion without identifying any statute, regula- tion, or court decision that made the reinstatement of the deliveryman -- as opposed to the alleged sexual harass- ment-- illegal. Thus, our decision in Stroehmann Bakeries implicitly rejected the argument that an arbitration award may be vacated on public policy grounds only when the award requires conduct that is prohibited by positive law. Even more recently, in Exxon Shipping Co. I, we ex- pressly rejected this argument. We noted that the District of Columbia Circuit had accepted this argument but that the First, Sixth, Seventh, and Eighth Circuits had "taken a broader approach, ruling that arbitration awards reinstat- ing employees may be vacated if the awards are 'inconsis- tent with some significant public policy.'" 993 F.2d at 363
(citation omitted). We concluded that "the broader test adopted by the First, Sixth, Seventh, and Eighth Circuits appears to be the sounder approach." Id. Moreover, we upheld a district court order vacating an arbitration award that did not require conduct that violated any statute, reg- ulation, or other manifestation of positive **12 law.
*1193
In Exxon Shipping Co. I, which bears a striking factual resemblance to the case now before us, an able bodied sea- man on an oil tanker was given a drug test. If he had been found to have used illegal drugs, revocation of his mer- chant mariner's document would have been mandatory unless he showed that he was "cured," n5 and after revo- cation his continued employment on the ship would have been prohibited. n6 The results, however, were considered negative under the standards contained in the Coast Guard regulations (933 F.2d at 358 & n.1), and consequently his document could not be revoked, and no federal statute or regulation prohibited the company from continuing to employ him. Nevertheless, because the test results were considered positive under the company's more stringent standards (id.), the seaman was discharged. An arbitration panel found that the seaman's drug use had been "'conclu- sively established'" (933 F.2d at 359 n.1), but the panel ordered his reinstatement. The district court, however, va- cated the award, and we affirmed. Relying on Coast Guard regulations and other provisions of federal law, we identi- fied **13 "a 'well-defined and dominant' public policy against the operation of a vessel under the influence of drugs or alcohol" ( id. at 362), and we concluded that the arbitration award violated this policy. We emphasized
"the potentially disastrous effects of a major oil spill on the environment" and expressed "concern about seamen operating vessels under the influence of drugs or alco- hol." Id. at 367. We stated that "the magnitude of possible harm to the public distinguished this case from those cases upholding arbitration awards against public policy chal-
lenges," and we added that "the operation of an oil tanker by an employee under the influence of drugs or alcohol can result in far more severe and widespread damage than the workplace negligence of the paper plant employee in Misco." Id. at 368. n7 Thus, like other courts of appeals in comparable cases, we vacated the *1194 arbitration award requiring the seaman's reinstatement even though it did not require conduct prohibited by positive law. See Gulf Coast Indus. Workers Union v. Exxon Co., U.S.A.,
991 F.2d 244, 257 **14 (5th Cir.), cert. denied, 126
L. Ed. 2d 375, 62 U.S.L.W. 3334, 114 S. Ct. 441 (1993)
(affirming order vacating arbitration award that required reinstatement of refinery worker who tested positive for drugs); Delta Airlines Inc. v. Air Line Pilots Ass'n Int'l,
861 F.2d 665, 674-75 (11th Cir. 1988), cert. denied, 493
U.S. 871, 107 L. Ed. 2d 154, 110 S. Ct. 201 (1989) (va- cating arbitration award that reinstated a pilot who flew while intoxicated); Iowa Elec. Light & Power v. Local Union 204, Int'l Bhd. of Elec. Workers, 834 F.2d 1424,
1430 (8th Cir. 1987) (refusing to reinstate nuclear power plan employee who committed serious safety violation); Amalgamated Meat Cutters v. Great Western Food Co.,
712 F.2d 122, 125 (5th Cir. 1983) (reversing arbitration award reinstating over-the--road truck driver who drank alcohol while on duty).
n5 46 U.S.C. § 7704(c) (Supp. 1993); see also
46 C.F.R. § 16.201(c) (1992).
n6 46 U.S.C. § 8701(d) (Supp. 1993); see also
46 C.F.R. § 16.370(d) (1992).
**15
n7 Our decisions in Stroehmann Bakeries and Exxon v. Exxon Seamen's Union I do not conflict with our earlier decisions and statements concern- ing the power of a federal court to vacate an arbi- tration award on public policy grounds. In Ludwig Honold Mfg. Co. v. Fletcher, 405 F.2d 1123, 1128 n.27 (3d Cir. 1969), we stated that HN3 an award may properly be vacated either because it "violates a specific command of some law" or "because of inconsistency with public policy."
In Kane Gas Light & Heating v. International Bhd. of Firemen, Local 112, 687 F.2d 673, 681 (3d Cir. 1982) (in banc), cert. denied, 460 U.S. 1011,
75 L. Ed. 2d 480, 103 S. Ct. 1251 (1983) (foot- note omitted), we stated that an award should be vacated "only where it conflicts directly with fed- eral or state law." We do not believe, however, that this statement, when read in context, was meant to embrace the view that an award may be vacated only when it orders conduct that positive law for-
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Page 6
bids. First, the statement was offered as an inter- pretation of the earlier statement in Honold. See id. Second, the opinion subsequently approved the broader view that HN4 an award may be vacated if "upholding it would amount to 'judicial condo- nation' of illegal acts." Id. at 682. Applying this test, we refused to vacate the arbitration award, which required reinstatement of a discharged employee, because we concluded that reinstatement would not amount to such condonation. Id. In the present case, by contrast, the district court observed, and we agree, that the arbitration award requiring Fris's reinstatement "sent an undesirable signal to other employees that alcohol abuse in a safety-sensitive job and industry would not be severely punished." Dist. Ct. Op. at 30; cf. Newsday v. Long Island Typographical Union, No. 915, 915 F.2d 840, 845
(2d Cir. 1990), cert. denied, 499 U.S. 922, 113 L. Ed. 2d 247, 111 S. Ct. 1314 (1991) (reinstatement of employee found to have sexually harassed co- worker would "condone" this behavior). Third, our subsequent decisions have not interpreted Kane Gas Light & Heating as adopting the view that an award may be vacated only if it requires illegal conduct. See Exxon Shipping Co. I, 993 F.2d at 363 n.6; Super Tire Engineering v. Teamsters Local Union No. 676, 721 F.2d 121, 125 n.6 (3d Cir. 1983), cert. denied, 469 U.S. 817, 83 L. Ed. 2d 31, 105 S. Ct.
83 (1984).
**16
B. Applying our holding in Exxon Shipping I, we agree with the district court that the award in question in this case violates a public policy that is both well defined and dominant. viz., that an owner or operator of an oil tanker should not be compelled to reinstate to a "safety- sensitive" position an individual who has been found to be intoxicated while on duty on that vessel.
Congress has expressly declared that it is "the policy of the United States that there should be no discharges of oil" into waters under federal jurisdiction. 33 U.S.C. §
1321(b)(1) (1988). Congress, moreover, has implemented this policy by enacting strong remedial and penalty pro- visions. HN5 Under the Clean Water Act, 33 U.S.C. §
1321(f) (1988), the owner or operator of an oil tanker that causes a spill is liable for the costs of removal. Similarly, under the Oil Pollution Act of 1990, 33 U.S.C. § 2702
(Supp. 1993), an owner or operator may be liable for, among other things, removal costs, injury to natural re- sources, loss of the use of natural resources for subsis- tence, injury to real or personal **17 property, loss of taxes by a government unit, loss of profits and earning capacity, and any increase in the cost of providing public
services during removal. While there are limits on liability under both Acts, these limits do not apply if the spill was caused by gross negligence, willful misconduct, or, under the Oil Pollution Act, the violation of an applicable fed- eral regulation. 33 U.S.C. §§ 1321(f)(1), 2704(c) (1988
& Supp. 1993). The Clean Water Act also provides for substantial civil and administrative penalties. 33 U.S.C.
§§ 1319(d) & (g) (1988 & Supp. 1993). Moreover, the Clean Water Act and the Oil Pollution Act generally do not preempt state laws regarding liability for the discharge of oil, and many states have enacted such statutes. See, e.g., Alaska Stat. § 46.03.822 (1993); Cal. Harb. & Nav. Code §§ 151, 293 (Deering 1993); Del. Code Ann. tit. 10,
§ 8134(c) (1992); Me. Rev. Stat. Ann. tit. 38 § 552(4)(c)
(West 1992); Md. Envir. Code Ann. § 4-417(a) (1993);
N.J. Stat. Ann. 58:10-23.11a--z (1992); N.Y. Nav. Law §
181 (McKinney 1993); Or. Rev. Stat. § 466.640 (1991); Pa. Cons. Stat. Ann. § **18 6023.3(b) (Supp. 1993); Wash. Rev. Code § 90.56.370 (1991). In addition to these civil remedies and penalties, an owner or operator of a tanker that causes a spill may be criminally liable un- der an array of federal and state statutes. See, e.g., 33
U.S.C. §§ 407, 411, 1232(b), 1319(c) (1988); 46 U.S.C. §
3718(b) (Supp. 1993); Alaska Stat. § 46.03.790(d) (1993);
Md. Envir. Code Ann. § 4-418 (1993).
Not only has Congress enacted measures designed to prevent and deter oil spills, but Congress has also focused specifically on the risk that such spills may be caused by oil tanker personnel who are under the influence of alco- hol or drugs. The Senate Report on the Oil Pollution Act of 1990 stated:
The captain of the Exxon Valdez had a blood alcohol level of .06 when tested nine hours after the vessel ran aground. This is in ex- cess of the current Coast Guard regulations which prohibit the operation of a vessel with a blood alcohol content greater than .04.
Sen. Rep. No. 99, 101st Cong. 2d Sess. 10 (1990), reprinted in 1990 U.S.C.C. A.N. 750, 758. Referring to a
"serious and pervasive problem in **19 the maritime industry," the report concluded:
The Committee believes that it is beyond dis- pute that the public has an overriding interest in assuring that oil tanker personnel perform- ing duties which directly affect the safety of a vessel's navigation or operations do so free of the influence of alcohol.
Id. at 10, 1990 U.S.C.C.A.N. at 758-59. The report added:
"The Committee believes strongly that serving in safety
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Page 7
sensitive positions on oil tankers while impaired by alco- hol is wholly incompatible with the need to ensure safe operations." Id.
Consistent with these views, HN6 the Coast Guard has promulgated regulations permitting a marine em- ployer to require crew members on commercial vessels to undergo a chemical test for alcohol or drugs when the *1195 crew member is involved in an accident or is suspected of being intoxicated. 33 C.F.R. § 95.035
(1993). A crew member who is intoxicated while on duty is guilty of a crime and is liable for a civil penalty. 33
C.F.R. § 95.055 (1993). Marine employers are prohibited from allowing an intoxicated individual to "stand watch or perform other duties" ( 33 C.F.R. § 95.050(b) (1993)) and must exercise "due diligence" to see that the regula- tions **20 concerning intoxication are not violated ( 33
C.F.R. § 95.050(a) (1993)). n8
n8 Like these Coast Guard regulations, other federal statutes and regulations prohibit on-duty in- toxication by employees holding a variety of other safety-sensitive positions. See Exxon Shipping I,
993 F.2d at 361-62 & n.4.
While we are aware of no statute or regulation that directly prohibits the owner or operator of an oil tanker from continuing to employ a crew member who is found to be intoxicated on duty, n9 there can be no doubt that the statutes and regulations we have noted convey the un- equivocal message that such an owner or operator should take every practicable step to ensure that an intoxicated crew member does not cause or contribute to an oil spill. In addition to the possibility of liability for removal costs, civil damages, and penalties, an owner or operator might face additional sanctions if an accident is caused by the continued employment of a crew member with a history of intoxication while **21 on duty. For example, if the employer's continued employment of the crew member were found to constitute gross negligence, it could be ar- gued that the otherwise applicable limitations on liability would not apply. Moreover, the continued employment of the crew member could be advanced as a ground for criminal liability. It is noteworthy that two of the crimi- nal offenses for which Exxon and Exxon Shipping were indicted following the grounding of the Exxon Valdez were based on the employment of crew members who were allegedly "incompetent" or "physically or mentally incapable" of performing their duties. n10
n9 HN7 A person lacking a valid merchant mariner's document may not be employed as an able bodied seaman (46 U.S.C. § 8701(b) (Supp.
1993)), and such a document may be suspended or
revoked for, among other things, violating a "law or regulation intended to promote marine safety or to protect navigable waters," an act of misconduct or negligence while on duty, or a conviction within the prior three years for operating a motor vehi- cle under the influence of alcohol and certain other similar offenses. 46 U.S.C. § 7703 (Supp. 1993).
**22
n10 The charges were: wilfully and knowingly failing to ensure that the Exxon Valdez was con- stantly manned by competent persons, in violation of 33 U.S.C. § 1232(b)(1) (1988) and 33 C.F.R.
§ 164.11(b) (1993); and wilfully and knowingly employing and causing persons to be engaged on the crew knowing them to be physically and men- tally incapable of performing the duties assigned to them. Indictment in United States v. Exxon Corp. and Exxon Shipping Co., Criminal No. A90-015
CR. (D. Ala.).
If the owner or operator of an oil tanker employed an able bodied seaman whose merchant mariner's doc- ument had been suspended or revoked based on intox- ication while on duty or some other form of alcohol- related misconduct, the owner or operator would violate
46 U.S.C. § 8701(b) (Supp. 1993) n11 and would be liable under 46 U.S.C. § 8701(d) (Supp. 1993) for a civil penalty of $500. n12 Under the narrowest understanding of a fed- eral court's authority to vacate a labor arbitration award on public policy **23 grounds -- i.e., that a federal court may do so only if the award requires conduct that is prohibited by positive law -- a court could properly vacate an arbitration award requiring the reinstatement of such a seaman. It seems quite unrealistic, however, to say that a statute such as 46 U.S.C. § 8701, which imposes a modest civil penalty, constitutes a clearer or stronger expression of public policy than the statutes and regulations relating to civil and criminal liability for oil spills, n13 since these
*1196 statutes and regulations may result in millions of dollars of liability. n14
n11 HN8 Under 46 U.S.C. § 8701(b), it is un- lawful to engage or employ an individual to serve on board a covered vessel if the individual lacks a merchant mariner's document.
n12 HN9 Under 46 U.S.C. § 8701(d), " a per- son (including an individual) violating this section is liable to the United States Government for a civil penalty of $500."
n13 It may of course be argued that the preven-
11 F.3d 1189, *1196; 1993 U.S. App. LEXIS 31688, **23;
144 L.R.R.M. 2955; 127 Lab. Cas. (CCH) P10,956
Page 8
tion of oil spills does not require vacating arbitra- tion awards such as the one at issue here because the owners and operators of oil tankers, aware of the liability they may incur if an intoxicated crew member causes a spill, will not enter into collective bargaining agreements requiring the arbitration of grievances related to the discharge of such a crew member unless it is efficient to do so. Both the Clean Water Act and the Oil Pollution Act, however, gen- erally limit an owner's or operator's liability for the damage caused by the spill. Under the Clean Water Act, liability is capped at $250,000. 33 U.S.C. §
1321(f) (1988). Under the Oil Pollution Act, the limit is $10 million. 33 U.S.C. § 2704(a)(1)(B)(i)
(Supp. 1993). Since the actual damage caused by a major oil spill can exceed these amounts, an owner's or operator's potential liability under federal law may not lead to collective bargaining agreements that deal in the most efficient way with the problem of seamen who are found to be intoxicated on duty.
**24
n14 In a somewhat similar vein, the Restatement (Second) of Contracts, states that in determining whether the enforcement of a contract should be denied on public policy grounds, the ex- istence of a provision of positive law prohibiting the conduct required under the contract is not nec- essarily sufficient. See Section 178, cmt. b and c
(1979).
Accordingly, based on our prior decision in Exxon Shipping Co. I and on the statutes, regulations, and ex- pressions of congressional policy previously noted, we conclude that there is a well defined and dominant policy that owners and operators of oil tankers should be per- mitted to discharge crew members who are found to be intoxicated while on duty. An intoxicated crew member on such a vessel can cause loss of life and catastrophic en- vironmental and economic injury. Some of this injury may not be reparable by money damages. Moreover, because of the limitations on liability under the Clean Water Act and the Oil Pollution Act, n15 it is entirely possible that much of the cost resulting from a major oil spill may fall on taxpayers and those who are **25 injured by the ac- cident. While the federal labor laws undoubtedly embody a strong policy favoring the settlement of labor disputes by arbitration, that policy must yield in the present context to the public policy favoring measures designed to avert potentially catastrophic oil spills. n16 In Exxon Shipping I, we held that this policy precluded the reinstatement of a seaman who tested positive for marijuana. Consistency
with this precedent dictates a similar result here. n17
n15 See page 12, supra.
n16 Cf. William B. Gould IV, Judicial Review of Labor Arbitration Awards -- Thirty Years of the Steelworkers Trilogy: The Aftermath of AT&T and Misko, 64 Notre Dame L. Rev. 464, 487-88 (1989)
("If a certifying agency was to find that a drunken or drug produced stupor caused the Valdez oil spill, reinstatement of the guilty employee, whether by virtue of an arbitrator's award or a certifying agency's order, must be scrutinized carefully by a reviewing court. Common sense, let alone a proper application of the law of labor arbitration, requires no less.").
n17 Because we hold that the district court cor- rectly vacated the arbitration award on public policy grounds, we do not reach Exxon Shipping's argu- ment that the award was improper for the additional reason that it did not draw its essence from the col- lective bargaining agreement.
**26 III.
For the reasons explained, therefore, we affirm the order of the district court.
DISSENTBY: SEITZ
DISSENT: SEITZ, Circuit Judge. dissenting.
In the context of the application of the same public policy issue here presented, this court said in Kane Gas Light & Heating v. International Brotherhood of Firemen, Local 112, 687 F.2d 673, 682 (3d Cir. 1983), cert. denied,
460 U.S. 1011, 75 L. Ed. 2d 480, 103 S. Ct. 1251 (1983): Consideration of Consolidated Freightways, Campbell Soup, and Otis Elevator convinces us that only if uphold- ing an award would amount to "judicial condonation" of illegal acts, should the award be vacated on grounds of inconsistency with public policy.
While agreeing that illegal acts are not involved here, the majority say that the quoted ruling is distinguishable, permitting it to promulgate a different controlling legal rule. Given the quoted ruling in Kane Gas Light, I submit that it is not distinguishable. If the explicit rule in that case is to be rejected, it is for an en banc court to do so. Otherwise, our Internal Operating Procedure, making reported opinions binding on subsequent panels, IOP 9.1, will be deprived of **27 its stabilizing value.
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