2006/Vol. 5 No.1 - Hamline Law - Hamline University

2006] ARBITRATION: THE BASICS 57
VIII. THE DECISION
A. Use of the Contract, the Law, and Public Policy
Arbitrators have great latitude when rendering a decision and can
decide cases based on their own subjective notions of justice and equity,
disregarding substantive law. 221 It is argued that arbitrators should base
their decision on the four corners of the contract. 222 In some
circumstances, however, arbitrators might want to take into account
substantive law and public policy in making determinations. 223
Arbitrators who favor the contract as the basis of the decision view the
221. See, e.g., Hill v. Cloud, 648 So. 2d 1383, 1389 (2d Cir. 1995) (quoting
Commercial Arbitration Rules of the American Arbitration Association) (stating that
“[t]he arbitrator may grant any remedy or relief that the arbitrator deems just and
equitable and within the scope of the agreement of the parties”).
222. See Peoples Sec. Life Ins. Co. v. Monumental Life Ins. Co., 991 F.2d 141,
147 (4th Cir. 1993) (quoting Upshur Coals Corp. v. United Mine Workers, Dist. 31,
933 F.2d 225, 226-28 (4th Cir.1991)) (stating that, “[a]lthough we may disagree
with an arbitrator’s interpretation of a contract, we must uphold it as long as it
‘draws its essence from the agreement’”); In re Copaz Packing Corp., 105 LA 1074
(Feldman 1995):
“[T]he language of the four corners of the agreement are generally the only
language that can be dealt with when an arbitrator determines the result in a labor
arbitration matter. There are a few exceptions to that general rule but those
exceptions do not apply in this particular case. The language of the contract of
collective bargaining revealed the wages to be paid to a group of individuals who
have already reached the applicable base labor rate and a wage will be paid to job
entry personnel. Wages are a creature of the contract. In other words, evidence
outside the four corners of the agreement, unless it is specifically referred in the
contract do not control the meanings and statements within the four corners of the
agreement.”
Id.
223. See Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 26 (1991)
(quoting Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614,
628 (1985)) (stating that, “[b]y agreeing to arbitrate a statutory claim, a party does
not forgo the substantive rights afforded by the statute; it only submits to their
resolution in an arbitral, rather than a judicial, forum”); In re Cargill, Inc., 117 LA
214 (Feldman 2002):
Under the modem evolution of that, has come findings that show that outside law
may be engrafted upon a contract of collective bargaining whether that collective
bargaining contract contains such language or not of placing that outside law within
the terms and meanings of the four corners of the contract.
Id. (holding the Federal Mine Safety and Health Act of 1977 would be engrafted
onto contract).