Postal Service v. Letter Carriers – Oral Argument – April 20, 1988

Media for Postal Service v. Letter Carriers

Audio Transcription for Opinion Announcement – April 27, 1988 in Postal Service v. Letter Carriers

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William H. Rehnquist:

We will hear argument first this morning in No. 87-59, United States Postal Service v. National Association of Letter Carriers.

Mr. Nager, you may proceed whenever you are ready.

Glen D. Nager:

Thank you, Mr. Chief Justice, and may it please the Court:

This case comes to the Court on a writ of certiorari from the Court of Appeals for the District of Columbia Circuit.

That Court held that the Postal Service must comply with an arbitration award that orders to reinstate to a letter carrier position an individual who has been criminally convicted of failing to deliver over 3500 pieces of mail, and who an arbitrator found posed a risk of again delaying the mail in the future.

We have sought review by this Court, because we believe that the Postal Service cannot comply with the decision below without defaulting upon its statutory obligations to ensure that the mail is reliability delivered.

The facts of the case are relatively simple.

In June of 1984, postal inspectors made a lawful search of the personal automobile of the Grievant in this case, Mr. Edward Hyde.

In the course of that search, they found over 3500 pieces of mail in the back seat of the car.

Some of the mail contained United States Treasury checks, and some of those checks were dated April 1, 1983 indicating that the mail had been delayed, some of the pieces of the mail had been delayed at least a year and a half.

The Postal Service immediately had Mr. Hyde arrested, and charged him with unlawful possession and unlawful delay of the mails in violation of 18 U.S.C.–

John Paul Stevens:

May I ask you a factual question, Mr. Nager.

What is the normal, how much mail would he normally carry?

This is not a year and a half’s accumulation of mail obviously, 3500 pieces.

Would that be a couple of day’s mail?

Glen D. Nager:

–Justice Stevens, I really do not know the answer to that.

His route was in Long Island, New York, in Jericho, New York, and I really do not know how many houses that covered.

John Paul Stevens:

It is kind of hard to understand how mail that old could be.

He must have delivered some of it since that period.

Glen D. Nager:

I think that is probably right, but the record does not reflect it, and I just do not know.

Antonin Scalia:

Was any of that junk mail, or was it all good mail, I mean if it was junk mail–

Glen D. Nager:

The U.S. Treasury checks, I doubt were junk mail.

The Postal Service charged Mr. Hyde with unlawful possession of the mail and unlawful delay of the mail.

And he pled guilty to the latter offense, and was sentenced to eighteen months probation, a condition of which that he enter a complete rehabilitation program for compulsive gamblers.

Now because of his criminal dereliction of duties, the Postal Service sought to discharge Mr. Hyde.

The Respondent, the National Association of Letter Carriers, filed a grievance on Mr. Hyde’s behalf under the collective bargaining agreement that the Postal Service and the Letter Carriers have entered into.

And they argue that the Postal Service was without just cause to discharge Mr. Hyde, and that he should be reinstated to his letter carrier position.

Sandra Day O’Connor:

Mr. Nager, I take it that there has been a stay entered, so that this employee has not been back on the job?

Glen D. Nager:

Yes, Justice O’Connor.

The Solicitor General sought a stay from the Chief Justice of the D.C. Circuit’s mandate.

Sandra Day O’Connor:

And the case is not moot, because the employee still wants to return to being a letter carrier?

Glen D. Nager:

Yes, that is right.

And in addition, I am sure that the Union would file a grievance seeking back pay from the date which the Postal Service was supposed to start complying with the arbitration order.

Harry A. Blackmun:

Mr. Nager, what is the connection between compulsive gambling on the one hand and not delivering mail on the other?

Glen D. Nager:

Justice Blackmun, the record does not reflect it.

I have speculated on it.

The arbitrator found that his failure to deliver the mail was attributable to his compulsive gambling problem.

He did not say how it led to his failure to deliver the mail.

And the Postal Service’s collective bargaining agreement with the Letter Carriers does not provide and in fact prohibits use of transcripts during the arbitral proceeding.

So there is no record of testimony on that point.

Harry A. Blackmun:

It is a little easier to understand if it was alcoholism.

There is no accusation here and certainly no conviction of stealing government checks, is there?

Glen D. Nager:

No.

He pled guilty to unlawful delay.

He was charged with unlawful possession, but he was not charged with stealing the mail.

An arbitrator convened a hearing with respect to the grievance, and ruled in Respondent’s favor for Mr. Hyde.

The arbitrator found that Mr. Hyde had in fact unlawfully delayed the mails, but he also found that it was attributable to what he characterized as the Grievant’s mental disease, his affliction for compulsive gambling.

He thus saw his own task as what he termed balancing the needs of society, the needs of the mentally ill, and the needs of the employee.

And he identified the differentiating factor in that balance what he called and I quote, “The possibility of rehabilitation”.

He then found that he did not know what the future prospects of rehabilitation were for Mr. Hyde.

And indeed, this was a tough decision for him, because he saw that there was a threat of recurrence of the misconduct.

But in that balance where there was a possibility of rehabilitation, he concluded that this is not a risk free society.

And thus, it is the Postal Service and the Postal Service’s patrons who should bear the risk of that future misconduct while there was a reasonable hope of rehabilitation for Mr. Hyde.

Sandra Day O’Connor:

Mr. Nager, in this case, there is a statute that provides that delivery of the mail is the highest priority of the Postal Service.

Glen D. Nager:

That is correct.

Sandra Day O’Connor:

On the other hand, there are statutes saying that the Postal Service will engage in collective bargaining, and there are statutes reflecting that rehabilitation is also appropriate for the employer to consider.

Now is it only where there is a statute that says that one has the highest priority that it would be justifiable then to rely on that as the public policy?

Glen D. Nager:

I think that it is clearly the case where Congress has indicated what the highest priority is among several competing statutes.

That the statute Congress has indicated has the highest priority should prevail.

Sandra Day O’Connor:

And if there were not such language?

Glen D. Nager:

If there were not such language, I think that the Court would, as it does in every case in which it is faced with statutes.

Sandra Day O’Connor:

With competing public policies?

Glen D. Nager:

Correct.

In cases in which there were competing public policies, the Court would have to reconcile those statutes, as it does in any case where there are statutes that point in different directions.

That, of course, is not this case.

William J. Brennan, Jr.:

But Mr. Nager, labor arbitration has a high priority, too, does it not?

Glen D. Nager:

It does, Justice Brennan.

And we have tried to make it as clear as we can in our brief that we are not seeking in any way to destabilize the labor-arbitration process.

The Postal Service is committed to its labor-arbitration process.

Last year, for example, it had 45,000 grievances, 7500 of which–

William J. Brennan, Jr.:

You are arguing for a public policy exception?

Glen D. Nager:

Yes, as this Court has recognized.

And we believe that the–

William J. Brennan, Jr.:

It has been recognized, but to be kept in very narrow limits, is it not?

Glen D. Nager:

–That is correct.

But let me address why it is so important that the Court not only recognize that it pay attention to the public policy exception.

The argument in this case is that somehow allowing a public law to trump an arbitration decision would somehow destabilize the arbitration process.

But quite the opposite is true.

The Court has to remember how collective bargaining agreements are negotiated, and how arbitration provisions get put into collective bargaining agreements.

Typically, in a collective bargaining context, an employer and a union will have approximately ninety days upon which to agree.

If an agreement is about to expire, they will give notice ninety days before the expiration of the agreement.

And the union will come forward with a series of demands on numerous topics that they would like the employer to agree to.

And the employer will respond to those demands.

And over the course of ninety days, they will deal with provisions dealing with the various economics of their relationships, and the various work rules that govern their relationships.

Every one of those proposals can and oftentimes do have legal ambiguities in them.

And the fact of the matter is that if the parties had to resolve every legal ambiguity, just as they had to resolve every contractual ambiguity, before they entered into the contract, they would never be able to enter into a contract in the first place.

The public policy exception simply greases the wheel, so to speak, of the collective bargaining process.

It allows the parties to reach agreement on general contract language like a just clause provision.

And if the language is subsequently interpreted in a way that one or the other party thinks would put them in violation of public law, if they had to comply with it, they have the freedom to go to Federal Court and to seek to have that provision declared unlawful.

This Court’s decision in Kaiser Steel v. Mullins where the United Mine Workers and the steel company had agreed to contribute to the UMW’s pension plans for every ton of coal that the non-UMW steel producer sold to Kaiser.

Glen D. Nager:

Kaiser entered into that agreement.

And in fact, it had filed unfair labor practice charges with respect to an identical provision under previous agreements.

It agreed to the provision, and then it refused to contribute to the pension plans.

Byron R. White:

Well, Mr. Nager, I do not think that your opposition challenges the existence of a public policy exception.

The real question is does the public policy exception warrant overturning the particular arbitrator’s decision in this case.

Glen D. Nager:

I think that is correct, Justice White, and let me turn to that.

I was just trying to address Justice Brennan’s question about why the public policy exception existed and how broad or narrow it should be.

John Paul Stevens:

Let me ask before you get to that, because this is brought to my mind by your reference to the Kaiser case.

Do you dispute the fact that if we did not have a public policy problem in the case, that the arbitrator’s award would be one that would be a permissible reading of the collective bargaining agreement?

Glen D. Nager:

We have not disputed that in this case.

John Paul Stevens:

So the case that we have to decide is one in which we could assume arguendo that the parties had spelled out that if this particular problem should arise in the future, that this solution will be given, that this will be the solution.

Then we say would that contractual provision be against the public policy.

Glen D. Nager:

That is correct.

And we tried to brief the case that way.

We said by hypothesis we assume and we have agreed to this provision.

And the question is whether or not our statutory obligations preclude us from complying with it.

And the reason why I say that that hypothesis is a realistic one is not just because of the contract and the reasonableness or unreasonableness of the arbitrator’s award, but because that is the nature of collective bargaining and the types of situations that employers and unions find themselves in having to agree to ambiguous or unambiguous provisions on the recognition that either one of them can subsequently go to court and point out that that provision is inconsistent with public law.

Because th employer… it may not be important to the employer, even if it is illegal.

And it may be very important to the union.

And the employer does not want to end up having a strike over whether or not the provision is legal or illegal.

Byron R. White:

Do I understand from what you say that it would have been illegal for the Postal Department to have complied with this arbitration award?

Glen D. Nager:

That is absolutely correct, Justice White, and let me turn to why that is the case.

Antonin Scalia:

Before you do, it really might help both the employer and the union in those situations as well as help the courts if we made it pretty clear, as I thought that we had done in Misco, what the lines are.

So that the employer will very well know when he concedes something like this what he is getting himself into.

Do you not think that would be helpful, I mean you are not urging us that just because employers typically throw in the towel and say, well, I will fight that when it comes, that we have to decide these things case by case forever?

Glen D. Nager:

No.

Antonin Scalia:

I thought that we just had a case that is very much like this.

Glen D. Nager:

We think that it is fundamentally different from this case.

But to answer your question, we do think that clearer roles would be helpful to everyone.

We are saying that the Misco analysis applies in full force if there is a well defined and dominant public policy in existing law and legal precedent which is the standard that the Court used in Misco.

Glen D. Nager:

And if the arbitration award compromises or conflicts with that well defined and dominant public policy, then the award is unenforceable.

That is the legal standard that we are asking for.

The question in this case, as Justice White has asked, is what is the public policy and how does it conflict.

And the public policy in this case, we would submit, which the Respondents have conceded, is the public’s interest and Congress’ mandate that the mails be maintained, secure, and reliably delivered.

I think that it goes without saying that it is a fundamental premise of our entire economic and political system that the mails will be reliably and securely delivered.

The right to establish a post office and maintain it is recognized in the Constitution.

The government every day relies on the sanctity and integrity of the mails to ensure that the taxes are collected, and that benefit checks are delivered to the needy.

Businesses rely on the sanctity and integrity of the mails every day to ensure that their business transactions are timely conducted.

And the courts rely on the sanctity and integrity of the mails to ensure the safe conduct of judicial business.

And in recognition of that public interest, Congress has enacted a series of statutes, the first of which grants a limited public monopoly to the Postal Service.

It mandates that the Postal Service shall ensure the prompt, reliable, and efficient delivery of the mail.

Sandra Day O’Connor:

Of course, that mandate if broadly read could certainly override anything.

I mean it delays the mail to go to arbitration.

It would be more efficient to let the Post Office to dismiss the employee on the spot.

So you have got to have some line drawing within the line drawing.

Glen D. Nager:

That is absolutely correct, Justice O’Connor.

And that is why we have not suggested that the language of Section 101(a) of Title 39 which requires the Post Office to ensure a prompt, reliable, and efficient delivery of the mail by itself establishes not only the public policy which it does, but also the dominance and definition that this Court in Grace and Misco said was necessary.

The definition and the dominance which comes from Section 410(b) and from 18 U.S.C. 1701, which 410(b) makes applicable to the Postal Service in conjunction with 101(a) mandates that the Postal Service preserve the security and sanctity of the mails in preventing the kinds of actions by its own employers that Mr. Hyde engaged in in this case in the unlawful delay of the mail.

We have not argued that any award which the Postal Service thinks isolated and by itself might–

Sandra Day O’Connor:

But how about an employee who is just slow, just not very efficient; he did not steal the mail, but the employee just moved slowly?

Glen D. Nager:

–That is an act of misfeasance by the employee, but it is not an act of statutory malfeasance.

It is not something that we read the statute as prohibiting the Postal Service from tolerating.

We do read the statute as prohibiting the Postal Service from tolerating the employment of an individual who it knows there is a reason to believe that that person will intentionally not delay the mail again in the future.

Byron R. White:

Well, the Court of Appeals certainly did not think that it violated any statute.

Glen D. Nager:

The Postal Service looked at the statute and said that in order… the Court of Appeals said in order for us to agree not to enforce this arbitration award that we have to find a provision in the statute which says in its terms that the Postal Service cannot employ an individual who has committed this act or who presents a threat to the Postal Service.

But that specificity has never been required by this Court.

It was not required by the Court, for example, in Hurd v. Hodge where the Court read the equal protection.

Byron R. White:

It was not required in Misco either.

Glen D. Nager:

It was not required in Misco.

It was not required in Hurd v. Hodge.

Byron R. White:

I thought that you said that it would have been illegal, illegal for the Postal Service to rehire this fellow.

Glen D. Nager:

That is how we read our own statutory obligations, to preclude us from employing an individual.

Byron R. White:

The Court of Appeals certainly rejected that notion, I think.

Glen D. Nager:

Well, it did, we think incorrectly.

But the reason that it did was that it said that there has to be specific statutory language that in terms precludes the reinstatement of this individual.

But this Court has never required in order to refuse to enforce an arbitration award that degree of specificity in statutory language, take for example–

Antonin Scalia:

Maybe not, but have we not required a judgment on the part of the person who has been given that call that is so outrageous that no reasonable person could come to it.

I mean are you arguing that the arbitrator could not possibly have thought that the chances of rehabilitation outweighed the chances of any impairment?

Glen D. Nager:

No, we are not arguing that at all.

What we are arguing is that the letter carrier position in the Postal Service is not a testing ground for the arbitrator’s judgments about whether or not Mr. Hyde will eventually become fully rehabilitated, what the arbitrator said in–

Antonin Scalia:

What is the rule then, that whenever any Postal Service employee has committed a crime involving the mails that he must be dismissed?

Glen D. Nager:

Unless the arbitrator makes a factual finding based on the evidence presented at the arbitration hearing that he finds that there is not a risk that the misconduct will occur again in the future.

Antonin Scalia:

No risk, zero risk.

You cannot make that finding for any postal employee.

Glen D. Nager:

When I say no risk, that he does not find the basis of the facts before him that there is a undue risk that that misconduct will occur again in the future.

Antonin Scalia:

Well, did he not make that finding here, undue in the sense of the policy of trying to rehabilitate people?

Glen D. Nager:

What the arbitrator said in this case was that he found the risk.

What he said is, well, I think that if you keep him off employment for another sixty days and he shows some initial commitment to rehabilitating himself that you should assume the risk that he will commit misconduct in the future.

You are asking for a clear rule.

Let me give you an analogy where there is a clear rule that exists.

In the airline industry under the statutes regulating the safety of the airline industry, airlines are required to maintain the highest possible degree of safety.

And with respect to the alcoholics that Justice Blackmun mentioned before, the Federal Aviation Administration has said if there is a pilot who we know is an alcoholic, we will not recertify him to fly a plane and he cannot be employed to fly a plane, unless there is an established clinical evidence of his recovery and he has abstained from drinking for two years.

That is the kind of evidence and finding that we are suggesting that the arbitrator should be required to make a finding with respect to about a letter carrier who has committed a criminal act in failing to deliver or delaying the mail, that he will not do that again.

That is the degree of safety, and sanctity, and integrity of the mails that we believe Congress imposed the obligation upon the Postal Service to ensure.

Sandra Day O’Connor:

Here the arbitrator’s findings, if I remember correctly, were to the effect that the arbitrator is not totally persuaded that the employee presently has the emotional ability to perform the work in an acceptable manner.

And the arbitrator is not able to foretell what the future prospects of his rehabilitation may yield.

And you say that those findings are not sufficient.

Glen D. Nager:

That is correct.

Those findings indicated, the first one that you read about, that he was not totally persuaded that Mr. Hyde has the present emotional stability to perform the job, is why he did not put Mr. Hyde back in initially.

He postponed it for sixty days.

Glen D. Nager:

But then he did not say that at the end of sixty days that I will reconvene and see what Mr. Hyde’s mental status is.

He would not ask for additional evidence on whether or not Mr. Hyde was rehabilitated.

He said that at the end of sixty days, if he meets the following three conditions, you have to reinstate him.

Sandra Day O’Connor:

Well, suppose we agreed with you, what is the remedy, is it to remand to the arbitrator for a more appropriate remedy or new findings?

Glen D. Nager:

I do not think so, Justice O’Connor.

The question before the arbitrator is what are the facts and what does the contract provide.

He found the facts, and he also found what the contract provided.

He found that the contractually appropriate remedy was reinstatement to a letter carrier position at the end of sixty days.

This court… that is the question, whether or not that interpretation of the contract, as Justice Stevens has hypothesized, that we assume that the Postal Service agreed to, is against public policy.

There is no need for remand.

Anthony M. Kennedy:

It just seems to me that your rule is really going to displace the arbitrator’s judgment in most cases of discharge for wrongful acts.

If an employee fights a lot, if he is often late, he is an alcoholic.

We are just not use to making a finding that there is a zero risk or that there is an insignificant risk that this will reoccur.

And clinical psychologists certainly will not make that finding with reference to alcoholics, unless you have a two year period like we do for pilots.

Glen D. Nager:

Justice Kennedy, let me make two comments.

With respect to your first point about what other kind of cases would come in within the rule that we are talking about.

You have to again distinguish between acts of misfeasance and statutory malfeasance.

Here we see that Congress has prohibited for criminal sanction and definition particular acts that Postal Service employees shall not engage in.

Anthony M. Kennedy:

What was your answer with respect to the question about theft from the mails?

Glen D. Nager:

Theft from the mail is statutorily prohibited.

And unless there is a finding that the individual will not do it again, we believe that we are not statutorily +/.

Anthony M. Kennedy:

My point is that realistically that finding simply cannot be made, can it?

Glen D. Nager:

I do not dispute the difficulty of making clinical judgments, Justice Kennedy.

On the other hand, the Postal Service makes them in their initial discharge decisions.

The arbitrator makes them in cases where the arbitrator is entitled to do it.

And when there has been no arbitrator appointed in contractual disputes about the propriety of discharges, courts have to make them.

Somebody has got to make them.

The question for this Court to decide in our argument is that Congress has said that for this small class of cases that the courts have the final say on whether or not the risk is undue.

The arbitrator has the final say on whether or not there is in fact that risk.

But someone has to make the initial call as to whether there is in fact that risk.

Glen D. Nager:

And then someone else, maybe the arbitrator, or maybe the Postal Service and then the courts, and we say that it is the Postal Service and then the courts, has to make the decision about whether it is undue.

But the fact that it is difficult to make those findings does not relieve anyone of the obligation of having to make them, because the Postal Service has to make them initially.

And when they go to arbitration, the arbitrator still has to make them.

Byron R. White:

I thought that you agreed that the arbitrator would make decisions like this.

Glen D. Nager:

We have agreed that the arbitrator would make the decision as to whether or not there is a future risk.

Once he defines what he believes the future risk to be, then xx say that is up to the Postal Service in the first instance, and ultimately to the courts, as this Court said in Misco and W.R. Grace, as to whether or not the risk is undue.

Byron R. White:

I know, but that is up to him to decide whether there was cause for the discharge.

Glen D. Nager:

That is correct.

Byron R. White:

That is not only making these findings, but deciding whether… construing the word cause in the contract.

Glen D. Nager:

That is correct.

Byron R. White:

And that is his job, and he did it.

Glen D. Nager:

That is correct, he did.

We are not disputing that he misinterpreted the contract.

What we are saying is that he found that there was a risk, and he also found that there were offsetting mitigating factors.

He found the fact that Mr. Hyde’s father had died the year before, the fact that his brother had come close to nearly dying, the fact that he had cancer the year before, and above all else he found that there was compulsive gambler.

But if the risk that he found is one that the Postal Service is statutorily not permitted to incur which is what we suggest here, then we suggest that it is up to a court to vacate that arbitration award, even though the arbitrator correctly interpreted the contract.

Byron R. White:

Would you be here if he had not been a compulsive gambler, but he just had been negligent, he just was a lousy Postal Service man?

Glen D. Nager:

If he had just been a negligent or lousy Postal Service employee, he would not have met what we consider to be the threshold standard for these cases, that he had engaged in conduct that would have put him in violation of 18 U.S.C. 1703 and that there would not be a risk for him.

Byron R. White:

Well, he certainly would have these 3500 letters undelivered which would have been a crime.

Glen D. Nager:

Not if he were just negligent in doing so, again–

Byron R. White:

In the findings in this case, there is no causal connection between his gambling and the non-delivery.

Glen D. Nager:

That is what the arbitrator found.

The arbitrator said that there was a causal connection.

We do not know that it was, but he found it.

We are bound by the arbitrator’s findings.

There is nothing that we can do about them.

That is in fact Justice White the important point here.

That the Postal Service is bound by the arbitrator’s findings.

Given those findings, it is told that–

Byron R. White:

You are bound by some of them, and you do not want to be bound by some others.

Glen D. Nager:

–We think that we are bound by all of them.

Antonin Scalia:

Given those findings, you could not put him in a job where he could not steal mail, you really say that there is no way that you can accept his findings without violating the law?

Glen D. Nager:

That is correct.

Antonin Scalia:

I cannot believe.

It is a big operation, the Post Office.

That there is not some place that you could put this man, who had been there for thirty years with a clean record before this happened.

Glen D. Nager:

We are not suggesting that if the Letter Carriers in their grievance had said he did it, but he has got a problem, would you put him in another job where he does not have access to the mails, that if the arbitrator found that that was contractually appropriate, that that would put us in violation of our statutory mandate.

Antonin Scalia:

To prevent that?

Glen D. Nager:

His order says reinstatement.

And reinstatement in the ordinary English language means put the person where he was before.

And it certainly means that in the accepted understanding in the labor relations context.

John Paul Stevens:

May I clear up one factual thing.

We have talked about theft.

This is not a theft case, is it; he did not open any mail, did he, there is no evidence of that?

Glen D. Nager:

This is not a theft case.

John Paul Stevens:

It is just a delay case.

Glen D. Nager:

Unlawful delay.

John Paul Stevens:

He just left unopened and undelivered mail in his case.

Glen D. Nager:

And did not report it back to the Postal Service that he has failed to deliver it at the end of the day.

John Paul Stevens:

And the criminal proceeding did not involve any theft, it was just delay?

Glen D. Nager:

It was a guilty plea for unlawful delay.

Anthony M. Kennedy:

And did that criminal proceeding require scienter, does the statute require an intent to violate?

Glen D. Nager:

I believe it does, although I will have to–

Anthony M. Kennedy:

My reading is that gross negligence would suffice for a violation.

Glen D. Nager:

Well, again, if you put the term gross negligence on it, Justice Kennedy, you have got one of those statutory acts of misfeasance.

Whatever the standard is under 1703, our position is that we are statutorily obliged to enforce 1703 to prevent the recurrence of violations of 1703.

And if this person was identified by the arbitrator as a person who has violated 1703 and that there was a risk of him doing it again, our hands are tied.

We read our statutory obligations as precluding us from reinstatement.

Anthony M. Kennedy:

Maybe you have not had the opportunity to do this, but can you tell me, is this an unusual statement of mission, or does every agency have a statement that its primary mission is to perform certain functions?

Glen D. Nager:

Every agency–

Anthony M. Kennedy:

Because it seems to me that what you are saying is, as we go through the statutes, that we could find this in every agency in the government.

Maybe I am wrong.

Glen D. Nager:

–You will find it with respect to every employer who has statutory obligations, some of whom do not have to be agencies in government.

For example, the airlines and the airline industry that I made reference to before have statutory obligations.

Anytime that Congress passes a statute, there may be an arbitration award out there that could be brought in conflict with that statute.

Hopefully, arbitrators will not issue too many of those kinds of awards.

And you will not be put in the position that we are in here today very often.

But as we read the arbitrator’s award and as we read the statute, that conflict exists in this case.

With the Chief Justice’s position, I would like to reserve the remainder of my time for rebuttal.

William H. Rehnquist:

Thank you, Mr. Nager.

We will hear now from you, Mr. Secular.

Keith E. Secular:

Thank you, Mr. Chief Justice, and may it please the Court:

I would like to begin by referring to one specific point that Justice Scalia raised.

And that is the question of whether there is an alternative job.

This arbitrator’s decision requires the Grievant, Mr. Hyde, to be reinstated to the payroll of the Postal Service and that is all.

At that point, the Postal Service is free to implement the full range of its managerial rights.

And among those rights is to make a reasonable determination that someone is disabled for physical or psychological reasons, and cannot perform the functions of his position.

At that point, the Postal Service can assign a man to other duties.

It can put him on medical furlough.

It can require him to be examined by a psychiatrist.

All of those things can happen.

Byron R. White:

Well, they can happen, but I am not sure that the Union would lie down for having him reinstated in some other job on the grounds that there is a risk of his repeating his conduct.

Keith E. Secular:

Justice White, I do not think that is a fair presumption.

The central premise of our labor law jurisprudence is that the parties have a healthy constructive collective bargaining relationship.

Byron R. White:

Maybe we ought to dismiss the case as improvidently granted then.

Keith E. Secular:

Well, I think that the point is that the risk to the security of the mails that is posed by the government does not exist here, because, and we have not contested, there are other things that can happen here.

Whether the Union grieves or not, if management is right, that will be established through the grievance procedure.

This kind of procedure is something that happens every day in the Postal Service.

Sandra Day O’Connor:

Does not reinstatement require reinstatement to that job or an equivalent one, and is not this person a letter carrier?

Keith E. Secular:

Yes, this person is a letter carrier, but there are.

Sandra Day O’Connor:

So he has got to go back into a letter carrier’s position that is equivalent, that position of an equivalent one.

Keith E. Secular:

The answer is that he can be kept in the office.

A lot of what a letter carrier does is in the office.

Sandra Day O’Connor:

You are saying that the Post Office can just keep him on the payroll and not give him any duties.

Keith E. Secular:

No, he can sort mail within the office.

I think that it is a real stretch to say that Hyde, even if he remains as disturbed as he was at the time of these incidents, is going to mishandle the mail in the office in full view of his supervisors and coworkers, I mean the analogy–

Anthony M. Kennedy:

Are you saying that you would not be here if the order said that he is reinstated to his previous position, subject to the conditions?

Keith E. Secular:

Even if the award said that, what I am in effect conceding is that under our contract and under postal regulations that the Postal Service is not locked into sending this man out on the street.

There is more that can happen.

Anthony M. Kennedy:

Does the case turn on that?

Keith E. Secular:

I think that is one possible disposition.

I think that there is a lot more to the case, and I will address that now.

Let me begin by making the point that I think that the case, as it has been defined in the briefs, is extraordinarily narrow.

The Postal Service has conceded that it may employ persons who have been convicted of crimes, including persons who have convicted crimes in his phrase against the mails.

It concedes that it can employ persons who have had physical and mental disorders.

And there is even a concession in the reply brief that the Postal Service can employ an individual with a history of compulsive gambling.

Byron R. White:

The Postal Service says that it would have been illegal for them to retain this man on the payroll.

Keith E. Secular:

That is right.

That is now the issue.

The issue is that this is a special case.

That Edward Hyde has been found to be so dangerous, that to continue employment with the Postal Service is literally a violation of the Postal Service’s duties under the Act.

Now we think that this case can be disposed of on the basis of a very simple proposition.

That there has been no clear showing of the kind of explicit conflict between the Postal Service’s duties under the statute and the requirements of the award, which is the kind of conflict that is required in Misco.

Let me begin with the Act.

The relevant provisions of the Act consist initially of the mission defining provisions, which are essentially Sections 101 and 403.

Those provisions tell the Postal Service in effect to deliver the mail promptly, reliably, and efficiently, deliver the mail.

The statute does not contain any provisions which specify who the Postal Service is to employ to deliver the mail.

It does not specify any minimal qualifications.

And it does not specify who the Postal Service must discharge, with a couple of very specific exceptions for striking and in some instances for unlawful political activity.

The statute leaves those decisions to the discretion of the Postal Service with one obvious and highly significant qualification.

Keith E. Secular:

The Postal Service must exercise its right to hire and discharge in a manner that is consistent with its collective bargaining agreements.

The statute also provides that collective bargaining agreements may include provisions for resolution of adverse actions through binding third party arbitration.

Now that is all that the specific language of the statute says on these issues.

The actions of the parties and the arbitrator are completely consistent with this framework.

The Postal Service and the Union negotiated an agreement which preserves the Postal Service’s authority to manage the Postal Service, to discipline, and even discharge employees for offenses against the mail, with the one qualification which is provided for in the statute, that any disputes over whether someone should be discharged are to be submitted to an arbitrator for binding resolution.

That is what happened here.

Hyde unquestionably committed a serious offense.

We do not challenge that at all.

But the Union presented a very substantial case that there had been a material change in circumstances.

That the dereliction of duty occurred during a period in which Hyde was suffering extreme emotional instability, and that he was now in therapy.

Sandra Day O’Connor:

I thought that the evidence showed that some of these pieces of mail found in his personal automobile had been there for a year.

We are not talking about a one day delay here.

Keith E. Secular:

That is true.

I think that it is undisputed.

Sandra Day O’Connor:

I mean this was an extended period of time, and we are not talking about junk mail.

Keith E. Secular:

Well, actually, for the most part, we are talking about junk mail.

That is clear from the criminal case file which we lodged with the Court.

Most of the mail apparently was junk mail that arrived during the Christmas rush.

Hyde could not complete his route, put the mail in the trunk of his car, and his car was stolen.

Now obviously, he should have reported that.

He should never have brought the mail back home.

But what emerged in the criminal case and what led ultimately to a very favorable report from the probation department and the sentence of probation was that at this point that the gambling had taken over his life.

That was the accepted fact.

And that is consistent with what the literature reports about compulsive gambling.

That it can lead to this kind of distraction and dereliction of responsibilities on the job.

So that was the factual posture of the case.

The arbitrator was then called upon to determine whether there was just cause for discharge, and with the understanding that he could not foretell the future.

Now I recognize that the arbitrator said that I cannot foretell the future and that there is a risk.

But I would submit that if anything that those sentences which I think are the foundation of the government’s entire case strengthen the argument for enforcing the award.

Because what they show is that this arbitrator recognized the problem and thought about it before he made his decision.

Keith E. Secular:

And I think that it is important if we are really going to focus on exactly what the arbitrator said to emphasize that those sentences which establish that he cannot foretell the future occur essentially in the middle of the opinion, which consists of a general discussion of the evidence and the issue before him.

The arbitrator’s actual conclusions are on the last page of the award.

And they consist first of a reference to another arbitrator’s decision for the proposition that society must be prepared to take a small risk, and a conclusion that Hyde’s emotional problem did not render him unfit for further employment.

And the ultimate conclusion that he was not totally convinced that Hyde presently had the ability to perform in an acceptable manner.

Now that may be doubt, but I would respectfully submit that that is a very small doubt.

And the arbitrator dealt with that doubt.

William H. Rehnquist:

Mr. Secular, at page 22(a) of the award, of the arbitrator’s opinion, it says,

“The arbitrator is not able to foretell what the future prospects of a grievance rehabilitation may yield. “

“Now that is not saying that there is a tiny doubt in my mind. “

“He is saying I just do not know, as I read it. “

Keith E. Secular:

That is right.

Well, at this point, I think that he is accepting as a given that no one can know for certain what the future would bring.

I think that a clear indication of how he looked at the specific facts of this case are found in what he said on page 23(a).

And I think that the award in Samuel Bingham which involved the dangers of reinstating an epileptic employee in a manufacturing situation are important.

Because that is the analogy, as I see it, that the arbitrator found here.

And the Cone award speaks in terms of very small risks because of the management options and the availability of treatment.

That I think is the fairest construction of this award.

Sandra Day O’Connor:

Yes.

But here, you do have a statute placing highest priority on the security of the mail and the prompt delivery.

And that might mean that in the face of such an uncertain finding by the arbitrator, that this is one of those instances in which the judiciary can bring to bear its judgment.

Keith E. Secular:

Well, let me respond to that question, which I think goes to the heart of the case in this manner.

If we had a crystal ball that we could peer into and we could see that if Hyde were placed back on the job that a significant amount of mail would be placed in the trunk of his car or otherwise mishandled, yes, this award would violate public policy.

The problem is that obviously we cannot foretell the future, which is exactly what the arbitrator recognized.

Because we are dealing with uncertainty, the question is whether the statute prohibits the employment of individuals who may be a greater risk than the average employee, or in this case the next employee hired off the employment register.

I do not think that that statute creates any prohibition against the employment of high risk employees.

Now it could be argued, I suppose, as a matter of policy, that that would be a good idea, to prohibit the employment of high risk employees in the Postal Service.

But the fact is that Congress did not do that, and that is absolutely clear from the legislative history.

Congress intended these matters to be decided by arbitrators.

Now frankly, I do not think that there is more mishandling of the mail now than there was before the Postal Reorganization Act when the Postal Service had the authority to do exactly what it is seeking to do here, to walk away from an arbitration award on the ground that it is inconsistent with its statutory responsibilities.

Prior to 1970, the old Post Office Department pursuant to executive order had the authority to conduct advisory arbitrations in its dealings with unions.

Keith E. Secular:

But the Department always retained the authority to overturn an award for whatever reason that it chose.

And what Congress found, and this was after extensive studies of the Post Office Department, is that that system did not work.

It led to extremely low morale, low productivity, and tremendous frustration among the workers, which actually culminated in 1970 in a nationwide postal strike.

That was the context in which Congress reorganized the Postal Service.

I think that it would be completely inconsistent with congressional intent to attribute to Congress a purpose which is not stated anywhere in the language of the statute to give either management or the courts the authority to in effect substitute their judgment for an arbitrator’s that the risks involved in reinstating an employee are too great.

This public policy exception to the enforcement of arbitration awards has existed for a long time.

William H. Rehnquist:

You are not saying that it does not have any application in Post Office matters, are you?

Keith E. Secular:

No, no.

We acknowledge that there is a public policy doctrine in the Post Office.

But I think that that touches on an important point which goes to the posture of this appeal.

In Misco obviously, in the last footnote of the Court’s opinion, the Court left open the question of whether the public policy doctrine is limited as the D.C. Circuit saw it to violations of positive law.

Now the government has told us in its brief that that question, which was left open in the footnote, is not raised here, that the Court does not have to look at it.

Because it sees this case as involving nothing more than a violation of positive law.

So as I see this case, if there is no violation of the statute per se, that is the end of this appeal.

There is no further inquiry into any possible common law theory because I do not see the government raising it.

Anthony M. Kennedy:

Suppose the arbitrator said that there was a high risk of recurrence?

Keith E. Secular:

That goes to how the statute is interpreted.

I have suggested that even that statement would not be the basis for finding a conflict between the statute and the award.

I am prepared in the limited time that I have available–

Anthony M. Kennedy:

But we interpret the statute, I take it?

Keith E. Secular:

–That is right.

As a second position, I would grant that if an arbitrator made a finding like that, a public policy inquiry could be generated.

Now let me state before I go any further that if this arbitrator had made that finding, I do not see how under our contract that the employee would have been reinstated.

I think that it is entirely unfair to assume that postal arbitrators exercising their functions under a statutory scheme are putting back to work people who they find pose a high risk to the security of the mail.

That is not happening, and there is no reason for it to happen under a just cause provision.

What should happen ideally if the Postal Service feels that someone has a psychological problem and his treatment is not sufficiently effective to reduce the risks of further misconduct, that it should pose that question to the arbitrator.

The regulations that we have cited, which are used day to day in the Postal Service, permit the Postal Service to have an employee examined to generate psychiatric reports.

The Postal Service knows how to build a case that an employee is unfit for further employment because of a psychological impairment.

The Union can contest that.

And if the case is posed to the arbitrator that way, the arbitrator will make findings.

Keith E. Secular:

One of the problems in this case is that the Postal Service never really made that case here.

Anthony M. Kennedy:

But you are saying that just cause will always be synonymous with the public policy?

Keith E. Secular:

I think that it can be in the Postal Service.

Anthony M. Kennedy:

But that is up to the arbitrator, I take it?

Keith E. Secular:

Well, I think that the arbitrator will not interpret or does not have to say that just cause means that I will read the statute.

But I think that the factual inquiry which is rather basic, whether an employee is going to mishandle the mail, is essentially the same.

So it does not matter whether the arbitrator is deciding the case under a just cause standard or under a statutory standard.

If there is a difference, and if it is the kind of difference which justifies overturning the award here, I am afraid that you are setting the threshold of risk so low that virtually any case involving misconduct can be brought into the courts for a second look.

As I see it, what the Postal Service envisions is a bifurcated process, whereby first the arbitrator plays the role of something akin to an insurance actuary and figures out what the statistical likelihood that this fellow will commit further misconduct is.

And then management and then the courts pass judgment on whether that risk is acceptable.

William H. Rehnquist:

You do have a plea of guilty to a criminal offense.

Keith E. Secular:

That is right.

There is no question that looking at this case retrospectively that Hyde committed an offense involving the security of the mail.

But I think that it is important to point out that that statute, 18 USC 1703, which applies exclusively to employees and officers of the Postal Service, and they are the only ones who can be convicted of that statute, does not provide for loss of employment as a sanction.

So I think that the answer to that point is exactly what then Circuit Judge Marshall said in Otis Elevator in 1963.

That the policy that is embodied in that criminal statute was vindicated in precisely the manner that Congress intended, by a criminal conviction and by the imposition of a criminal penalty.

William H. Rehnquist:

But that is usual punishment that Congress provides for the violation of a criminal statute.

Either a term on probation, or in prison, or a fine.

It does not usually go on to specify that if you are a federal employee and have done this, you lose your job.

That is left to other authorities to decide.

Keith E. Secular:

Well, there are actually some statutes which do provide for loss of federal employment, and the striker example is one key example here.

But obviously, the answer to your question is yes.

My only point was a limited one.

That for purposes of a Misco analysis, I do not think that it is appropriate to rely on the criminal statute here.

Because that policy and this award cannot be said to be in conflict.

That policy was wholly vindicated.

William H. Rehnquist:

You could say the same of someone who was convicted of theft from the mails.

That the policy of the statute prohibiting theft was fully vindicated when he was sent to prison for two years and fined $10,000.

And I daresay that the reaction of most courts would be quite different in that case to the one that you suggest.

Keith E. Secular:

Um… I think the public policy, I would suggest that the criminal statutes are not a basis for that kind of public policy inquiry.

Keith E. Secular:

We do acknowledge that the Postal Reorganization Act is a basis for the inquiry.

And I did not read the government’s brief as suggesting anything more than that.

The policy that it is looking to at least in the brief is the policy that emanates from the Postal Reorganization Act itself.

And the theory, as I stated before, is a limited theory, that the Act imposes on management certain duties, and that this award requires management to violate those duties.

Thurgood Marshall:

Mr. Secular, on the other side of the coin, there have been instances where people have been acquitted of a postal violation and still discharged from the Postal Office.

Keith E. Secular:

That is correct.

Obviously, the standard of proof under a criminal statute is higher.

So that an arbitrator could decide that even if the proof did not rise to the level that a man could be convicted beyond the reasonable doubt standard, that there was still sufficient reason to discharge the employee.

I would like to respond now to certain specific contentions that the Postal Service advanced in its reply brief.

The government makes reference to cases which involve contracts which have been held to violate public policy, because of their tendency to induce improper conduct.

And that perspective, I think, underlies the argument that enforcement of this award may encourage misconduct by Hyde’s coworkers.

I do not think that that is a fair interpretation of the award or of the Union’s position.

The beginning of the award makes clear that the Union acknowledged throughout that delay of the mail is improper and that it is cause for discipline, and that it could be the basis for discharge.

The Union’s argument here was that there was a change in circumstances, a material change in circumstances, based on the fact that Hyde is now being treated.

I do not see how by any rational calculus, that whatever benefits a reasonable employee might determine he would derive from delaying the mail, and I do not know what they are, would not be outweighed by the costs recognized by this award, which include criminal conviction, a suspension of almost one year in length without pay, and the possibility of discharge, if he is unable to convince the arbitrator that there are grounds for reinstatement based on mitigating circumstances.

In addition, I want to make the point that at this point that to assert that the award may encourage others, may set a bad example for other employees, is in Misco’s language sheer speculation.

Because there has been no evidence no way or the other on that issue, none presented to the arbitrator and none presented to the court below.

The reply brief also makes reference to the balancing test which was enunciated as an element in a public policy inquiry.

I just want to state the position that under the Town of Newton v. Rumery, we would take the position that in any case involving the public policy doctrine that a balance of the interests at stake is appropriate and necessary.

Byron R. White:

Do I understand that you say that the public policy exception is limited as to the circumstances that the Court of Appeals stated, that the award must actually command illegal conduct?

Keith E. Secular:

I think that is the issue in this case given the way that it has been postulated.

Byron R. White:

That is your standard for the public policy exception?

Keith E. Secular:

Yes.

Antonin Scalia:

It has to command it, it would not be enough if no reasonable person could believe other than it would result in illegal conduct?

Give us a break.

It has to command illegal conduct?

Keith E. Secular:

I used the crystal ball example before.

If we could predict the future with certainty, and we would know that enforcing this award would result in a delay of the mail.

Antonin Scalia:

If a reasonable person would have to come to the conclusion that it would result in the violation of a statute, surely, that would be enough, would it not, if that is the only conclusion that a reasonable person could draw?

Keith E. Secular:

I would agree with that proposition in the abstract.

Keith E. Secular:

I would suggest though that it is unrealistic that a discipline case is ever going to come before the Court in that posture.

I can envision work rule cases where the arbitrator commands management or the Postal Service to operate in a certain way which is inconsistent with the statute.

We gave a rather silly example in our brief.

Suppose an arbitrator found that the entire Postal Service had to shut down in the summer months, so that letter carriers could have a vacation.

Well, that would be precisely the kind of hypothetical that Justice Scalia proposed.

Byron R. White:

But do you not think that the Court of Appeals has adopted in several cases the standard that there is no violation of public policy in enforcing an award, unless the award orders illegal conduct?

Keith E. Secular:

Yes.

The D.C. Circuit has taken the so-called narrow view.

And I agree that there are other Courts of Appeals which have adopted a broader formulation.

And that this Court has not resolved the issue, my only point.

Byron R. White:

But what if it is not limited to commanding illegal conduct?

Keith E. Secular:

Well, I do not see how a possibility of a theory based on the broader view of the public policy doctrine helps the government here.

I agree with that government.

This is not the case in which to address that issue.

Because the argument is, as I understand it, that compliance with this award would be a violation of management’s statutory duties.

So I see this case as requiring a finding of a direct conflict between the statute and the award.

John Paul Stevens:

May I ask you one last question.

The award says that at the end of the sixty day period that if it is shown that he has done these various things.

To whom was that showing to be made, do you understand, who was to make the findings after sixty days?

Keith E. Secular:

Well, I assume that it would be shown initially to management.

And if there were a dispute, that would be resolved through the grievance procedure.

John Paul Stevens:

To go back before the arbitrator if you had to?

Keith E. Secular:

That is right.

I have nothing further.

William H. Rehnquist:

Thank you, Mr. Secular.

Mr. Nager, you have one minute remaining.

Glen D. Nager:

I would like to use the minute to address three quick points.

One is there has been a lot of discussion of junk mail.

And let me stress that the reason why we have come to this Court with this case is because the Postal Service feels that every piece of mail that is given to the Postal Service, that the Postal Service is obligated to deliver and safeguard against undue risk of non-delivery.

Whether the mail in junk mail or whether it is checks for AFDC benefits to unwed mothers, all of the mail is important from the Postal Service’s perspective.

Glen D. Nager:

And what we are trying to do is to ensure that it is delivered.

Justice Scalia, I fumbled your question a little bit about how much risk, and let me try to readdress that.

What we consider to be an undue risk is an employee who there is a finding made is a significantly greater risk than the average employee.

That the average employee is not one that we have any indicia to know other than just systematic risk, that someone may commit misconduct.

But here we had identified for us–

William H. Rehnquist:

Thank you, Mr. Nager.

Your time has expired.

The case is submitted.