                                   United States Court of Appeals,

                                             Fifth Circuit.

                                             No. 91-6374.

              GULF COAST INDUSTRIAL WORKERS UNION, Plaintiff-Appellant,

                                                   v.

                        EXXON COMPANY, U.S.A., Defendant-Appellee.

                                            May 24, 1993.

Appeal from the United States District Court for the Southern District of Texas.

Before WILLIAMS, HIGGINBOTHAM, and BARKSDALE, Circuit Judges.

        JERRE S. WILLIAMS, Circuit Judge:

        Thomas Woods wants his job back. He lost it when he tested positive for cocaine, a clear

violation of Exxon's Alcohol and Drug Use Policy and its after-care program. The district court

refused to enforce an arbitration award instructing the company to reinstate him. The court held that

the arbitrator's ruling was doubly defective because (1) it offended public policy by ordering the

reinstatement of a proved drug abuser to his safety-sensitive position, and (2) the arbitrator exceeded

his authority by relying upon Woods's post-discharge conduct. We agree with the district court on

both counts and affirm the summary judgment in favor of Exxon.

                              I. FACTS AND PRIOR PROCEEDINGS

        This appeal is somewhat unusual for a disciplinary case in that the parties are in complete

agreement regarding the underlying facts. For the most part, they are straightforward and largely

stipulated.

        Exxon Company, U.S.A. ("Exxon") employed Thomas W. Woods, the grievant, as a process

technician at its Baytown, Texas petro-chemical refinery. Woods was not a desk-bound employee.

As a process technician, he was freely transferable into assignments involving the supply of electricity,

steam, water, and nitrogen to other parts of the plant. These volatile gases and liquids are produced
and handled at extremely high temperatures and pressures.1

       Woods is a member of the Gulf Coast Industrial Workers Union ("Union" or "GCIWU")

which, along with Exxon, is signatory to a collective bargaining agreement covering disputes between

the parties. As with most agreements, it authorizes Exxon to discipline or discharge its employees

for just cause and provides for final and binding arbitration of unsettled employee grievances. Article

26, Section B of the agreement provides: "The Company shall have the right to discipline and

discharge employees for just cause. The commission of the offenses listed in Schedule C [including

drug use] shall be just cause to render an employee liable to discharge on first offense."

       Since January 1990, Exxon has also had in place a comprehensive Alcohol and Drug Use

Policy that, while recognizing drug dependency as a treatable condition and encouraging troubled

employees to seek help, "absolutely prohibit[s]" a worker from using or being under the influence of

controlled substances on the premises. Any violation of the Policy is "cause for termination of

employment." The Policy also requires workers who have completed programs for substance abuse

or alcoholism to participate in a mandatory five-year after-care program. Among other things, the

after-care contract requires total abstinence from all alcohol and non-prescription, controlled drugs.

Employees are instructed what actions to take if a relapse occurs or if stress threatens to endanger

the worker's sobriety. The contract also authorizes unannounced and periodic random drug/alcohol

testing for the entire five-year duration of the after-care program. A positive test result is grounds

for disciplinary action, including termination. If the employee follows the instructions, he may receive

   1
    GCIWU argues that the record evidence contains no indication of Woods's duties at the
refinery, but does not dispute Exxon's assertion that Woods was freely transferable to these
potentially hazardous assignments. Although we are cautioned against usurping the arbitrator's
task of finding facts and drawing inferences, our public policy inquiry permits us to consider this
established evidence even though it may not have been considered by the arbitrator. See United
Paperworkers Intern. Union v. Misco, Inc., 484 U.S. 29, 44, 108 S.Ct. 364, 374, 98 L.Ed.2d 286
(1987); Chrysler Motors v. International Union, 959 F.2d 685, 689 n. 4 (7th Cir.1992).

                We take this opportunity, however, to highlight a frustrating difficulty with this
       case. In discussing the record, both parties make numerous references to what transpired
       at the arbitration hearing. The hearing transcript, however, was never entered into the
       record and is not before us on appeal. Since both Exxon and the Union reference the
       arbitration hearing, we take judicial notice of those portions of the transcript to which the
       parties refer pursuant to FED.R.EVID. 201. See generally 10 MOORE'S FEDERAL
       PRACTICE § 201.60 (1988).
a second chance. If he fails to comply, he faces possible termination.

          In April 1990, Woods voluntarily informed his supervisor at Exxon that he had recently

participated in a 30-day, alcohol-rehabilitation program. In accordance with the stated Policy, Woods

met with management to fashion his after-care program. Woods agreed to forego all alcohol and

non-prescription drugs and to notify his supervisor or a counselor in case of relapse. In addition,

Woods acknowledged that Exxon would perform random tests for drugs and alcohol throughout the

five-year period. He signed an agreement, which provided in part:

          I have read Exxon's Alcohol and Drug Use Policy. The policy requires me to submit to
          periodic alcohol and drug testing at the Company's request. I understand I will be subject to
          periodic and unannounced alcohol and drug testing for a period of 60 months.... I understand
          that a positive alcohol or drug test result or refusal to submit to periodic testing is grounds
          for discipline as referenced in Exxon's Alcohol and Drug Use Policy.

The Policy then-effective provided that the "use ... of illicit or unprescribed controlled drugs ... is

strictly prohibited and is grounds for termination."

          Less than two months into the after-care program, Woods tested positive for cocaine.2 In

violation of the agreement, however, Woods had failed to notify anyone of his relapse. Moreover,

he never admitted using cocaine until the test results came back positive, three days after the test was

administered. Exxon immediately fired Woods for violating its Alcohol and Drug Use Policy and for

breaching the after-care agreement in using cocaine and also in failing to report his relapse.

          The Union filed a grievance contesting the termination. After the earlier steps in the grievance

process failed, GCIWU invoked arbitration.3 A single issue was submitted to the arbitrator: "Was

Thomas W. Woods discharged for just cause and, if not, what is the proper remedy?" Noting that

violation of the after-care agreement does not mandate automatic termination, the arbitrator held that

summary discharge was unjustified and too harsh a penalty. Instead, he sustained the grievance and

directed Exxon to reinstate Woods to his previous job without backpay contingent upon a negative



   2
    The Union does not dispute the testing process used, the chain of custody, or the accuracy of
the positive results. Moreover, the parties note that the findings do not indicate the degree of
impairment, if any, when the drug was used, or the amount ingested.
   3
       The parties stipulate that the grievance was properly before the arbitrator.
drug and alcohol screen.4 The arbitrator said in his opinion that while there was "no question that the

Company had just cause to discipline Woods," the grievant seemed "a good bet for successful

rehabilitation."

        When Exxon informed Gulf Coast that it did not intend to abide by the award, the Union

instituted this suit to enforce the award. Exxon counter-claimed to vacate the award asserting that

it violated sound principles of public po licy in directing the reinstatement of Woods to his

safety-sensitive position and also that the arbitrator exceeded his authority by basing his decision upon

Woods's post-discharge conduct.

        Upon cross-motions for summary judgment, the district court granted Exxon's requested relief

and vacated the arbitration award. Gulf Coast timely appealed.

                                          II. DISCUSSION

        In reviewing a summary judgment, we employ the same standard used by the district court.

Netto v. Amtrak, 863 F.2d 1210, 1212 (5th Cir.1989). Since the facts are undisputed here, our sole

mission is to determine whether "the moving party is entitled to judgment as a matter of law."

FED.R.CIV.P. 56(c). Accordingly, we review de novo the district court's order to vacate the

arbitration award. Forsythe Intern., S.A. v. Gibbs Oil Co. of Texas, 915 F.2d 1017, 1020-21 (5th

Cir.1990).

         In making this determination, we recognize that federal courts defer to the arbitrator's

resolution of the dispute "whenever possible." Anderman/Smith Co. v. Tenn. Gas Pipeline Co., 918

F.2d 1215, 1218 (5th Cir.1990), cert. denied, --- U.S. ----, 111 S.Ct. 2799, 115 L.Ed.2d 972 (1991).

Congress's decided preference for arbitration, as reflected in federal statutes regulating

labor-management relations, establishes a standard of review that is highly deferential to the

arbitrator's bargained-for judgment.

        Notwithstanding this admonition, however, arbitration awards are not inviolate. We properly

review arbitration awards to det ermine whether the award "stems from fraud or partiality; ...


   4
    Given the lag between Woods's discharge and the arbitrator's decision, the practical effect of
the award was a suspension of over one year.
concerns a matter not subject to arbitration under the contract; ... does not "dra[w] its essence' from

the contract; ... or ... violates public policy." Manville Forest Prod. v. United Paperworkers Intern.,

831 F.2d 72, 74 (5th Cir.1987). In this background we consider the two alternative grounds Exxon

asserts for vacating the award.

A. "Well Defined and Dominant" Public Policy5

        Exxon argues the well-settled rule that, as with any other contract, arbitration awards are

subject to challenge if they violate public policy. United Paperworkers Intern. Union v. Misco, Inc.,

484 U.S. 29, 42, 108 S.Ct. 364, 373, 98 L.Ed.2d 286 (1987). As the Supreme Court there explained,

a court's refusal to enforce an award that is contrary to public policy is little more than "a specific

application of the more general doct rine, rooted in the common law, that a court may refuse to

enforce contracts that violate law or public policy." 484 U.S. at 42, 108 S.Ct. at 373.

       Misco is the leading and dominant case setting out the rules applicable to reviewing arbitration

awards on public policy grounds. In Misco, an employee at a paper converting plant was discharged

after po lice apprehended him in a co-worker's car that was filled with marihuana smoke. The

company asserted that being in a car with a lit marihuana cigarette violated the plant's rule against

having an illegal substance on company property. The arbitrator upheld the grievance and ordered

reinstatement. As in the instant case, the company attempted to vacate the arbitration award on

several grounds, including the argument that reinstatement was offensive to public policy. The


   5
    We reject the Union's argument that Exxon somehow waived its public policy argument by
agreeing to arbitration and/or by not advancing it before the arbitrator. Under the terms of the
collective bargaining agreement, the company had no choice but to arbitrate the grievance after
earlier proceedings were exhausted. In any event, courts are the ultimate arbiters of public policy,
not arbitrators. W.R. Grace & Co. v. Local Union 759, 461 U.S. 757, 766, 103 S.Ct. 2177,
2183, 76 L.Ed.2d 298 (1983); see Iowa Elec. Light & Power v. Local Union 204, 834 F.2d
1424, 1427 (8th Cir.1987) ("Because collective bargaining agreements do not formulate public
policy, and arbitrators cannot consider matters not encompassed by the governing agreements,
"the question of public policy is ultimately one for resolution by the courts.' ") (quoting W.R.
Grace, 461 U.S. at 766, 103 S.Ct. at 2183).

                Indeed, had the arbitrator below relied upon public policy in reaching his decision,
       that, in some holdings, is considered error. Local No. P-1236 v. Jones Dairy Farm, 680
       F.2d 1142, 1144 (7th Cir.1982) ("When an arbitrator bases his award on public policy
       considerations, he has overstepped his authority and the court may review the substantive
       merits of the award.").
district court agreed that the award must be set aside because it contravened general safety concerns

that arise from the operation of dangerous machinery while under the influence of drugs, as well as

state laws proscribing drug possession.6 A divided panel of this Circuit affirmed, reasoning generally

that workplace safety militated against restoring the worker to his hazardous job. The Court

articulated the policy violated merely as "one against the operation of dangerous machinery by

persons under the influence of drugs or alcohol." Misco v. United Paperworkers International

Union, AFL-CIO, 768 F.2d 739, 743 (5th Cir.1985).

         The Supreme Court reversed our decision which had upheld vacating the worker's

reinstatement. The Court relied upon two reasons. First, our judicially-noticed public policy

formulation, although "firmly rooted in common sense," was insufficient to support the Court's

vacating the arbitration award because it ignored the requirement of W.R. Grace that a reviewing

court must, as a necessary first step, identify with specificity the existing laws and legal precedents

underlying its decision. W.R. Grace & Co. v. Local Union 759, 461 U.S. 757, 766, 103 S.Ct. 2177,

2183, 76 L.Ed.2d 298 (1983). The Supreme Court re-emphasized in Misco that, when applying the

narrow public policy exception, courts are forbidden to use imprecise notions of public policy which

would allow ill-defined considerations to negate the rule favoring judicial deference. "At the very

least," wrote Justice White, "an alleged public policy must be properly framed under the approach set

out in W.R. Grace, and the violation of such a policy must be clearly shown if an award is not to be

enforced." 484 U.S. at 43, 108 S.Ct. at 373. Second, even assuming the existence of such a policy,

the record evidence in Misco failed to demonstrate that the employee had actually operated dangerous

machinery while impaired.

        The dictates of Misco must resolve the parties' public policy arguments. Although the public

policy exception to our usual deference is not to be invoked lightly, a court may exercise its judicial

power to abrogate a private agreement when, for example, it gives short shrift to the public's

important yet unrepresented interests. When such violations are alleged, we enjoy more latitude in


   6
    The employee operated a slitter-rewinder machine, a hazardous object that uses sharp blades
to cut rolling coils of paper.
reviewing the arbitrator's decision. As the Supreme Court held in W.R. Grace, the question of public

policy is wholly independent from the collective bargaining agreement and "is ultimately one for

resolution by the courts." 461 U.S. at 766, 103 S.Ct. at 2183. In such instances, reviewing courts

resolve the issue by "taking the facts as found by the arbitrator, but reviewing his conclusions de

novo." Iowa Elec. Light & Power v. Local Union 204, 834 F.2d 1424, 1427 (8th Cir.1982); E.I.

DuPont de Nemours v. Grasselli Emp. Ass'n, 790 F.2d 611, 617 (7th Cir.), cert. denied, 479 U.S.

853, 107 S.Ct. 186, 93 L.Ed.2d 120 (1986).

        In the instant case, the district court relied exclusively upon the "common sense" basis for

refusing to reinstate Wood. While speaking generally about the public's interest in a safe workplace

free of alcohol- and drug-abusers, the court did not ground its decision upon an articulated review

of laws and legal precedents that frown upon the reinstatement of such employees.

        We do not focus upon whether Wood's underlying conduct violates public policy. It

obviously does. Rather, under Misco the courts must detail specifically the official measures

establishing the policy upon which it relies. After such an inquiry, we hold that it offends public

policy for Woods, an employee who occupies a safety-sensitive position, to retain his job upon testing

positive for cocaine while on the job and after having breached his company's drug abuse policy on

two occasions—first when he broke his pledge of abstinence, and second when he failed to disclose

his relapse. To be sure, public policy clashes unmistakably with Woods's use of a controlled

substance. We find that it is contrary to the arbitration award as well.7

   7
     In a footnote, the Misco Court declined to address the issue of whether invocation of the
public policy doctrine requires a showing that the "award itself violates a statute, regulation, or
other manifestation of positive law, or compels conduct by the employer that would violate such a
law." 484 U.S. at 45 n. 12, 108 S.Ct. at 374-75 n. 12. Legal authority generally holds that a
court need not find that the award itself is illegal before overruling an arbitrator on public policy
grounds. See R. GORMAN, LABOR LAW—UNIONIZATION AND COLLECTIVE BARGAINING 597
(1982) (stating that an award may be vacated when it, "although not requiring illegal conduct, is
said to be inconsistent with some significant public policy"); see also, e.g., Grasselli, 790 F.2d at
616; Iowa Elec., 834 F.2d at 1427-28 n. 3; U.S. Postal Ser. v. American Postal Workers Union,
736 F.2d 822, 824 (1st Cir.1984). But see, e.g., American Postal Workers v. United States
Postal, 789 F.2d 1, 8 (D.C.Cir.1986) (upholding an award reinstating a worker who admitted to
mishandling mail because reinstatement did not violate positive law or otherwise compel illegal
conduct). Although these authorities, with the exception of Iowa Electric, are pre-Misco, nothing
in the Supreme Court's decision mandates a contrary result. Indeed, refusing to vacate an
arbitration award unless it violates some manifestation of positive law would be difficult to square
       There are countless statutes, regulations, company guidelines, and judicial decisions that

pronounce the emphatic national desire to eradicate illicit drugs from the workplace. Every day,

legislatures, agencies, and courts reflect our intolerance of substance abusers and the astronomical

costs—both human and financial—associated with their behavior. As other cases have done, we

proceed to highlight the various legal sources reflecting our nation's "well defined and dominant"

desire for a drug-free society.

1. federal statutes

       The 1988 Drug-Free Workplace Act, 41 U.S.C. §§ 701-707, post-dates Misco. It mandates

drug-free workplace requirements for federal contractors. Under this Act, to which Exxon is bound

as a government contractor, "[n]o person ... shall be considered a responsible source ... for the

purposes of being awarded a contract for the procurement of any property or services of a value of

$25,000 or more from any Federal agency unless such person has certified to the contracting agency

that it will provide a drug-free workplace[.]" Id. § 701(a)(1). The Drug-Free Workplace Act also

requires private employers with federal contracts to (1) publish a statement notifying their workers

that the unlawful manufacture, distribution, dispensation, possession, or use of a controlled substance

is prohibited in the workplace, (2) notify the employees that their continued employment hinges on

compliance with the policies outlined in this statement, and (3) establish a drug-free awareness

program to inform their employees of the "dangers of drug abuse in the workplace." Id. §

701(a)(1)(A)-(D). A company's failure to comply with the Act subjects the company's federal

contract to possible termination.

       In the case o f grievant, Thomas Woods, there was no showing that he possessed or used

cocaine on the premises. But this is no longer a critical distinction. According to Exxon, it is also

bound as a government contractor to comply with the Defense Department's regulations mandating

a drug-free workplace. 48 C.F.R. 223.5 (1992) (stating the Department's policy "to ensure that its

contractors maintain a program for achieving a drug-free work force" since a contractor's employee's



with "the more general doctrine ... that a court may refuse to enforce contracts that violate law or
public policy." W.R. Grace, 461 U.S. at 766, 103 S.Ct. at 2183 (emphasis added).
use of illegal drugs "at any time " can "(1) Impair their ability to perform tasks that are critical to

proper contract performance [and]; (2) Increase the potential for accidents and for failures that can

pose a serious threat to the national security, health, and safety[.]") (emphasis added). A companion

regulation voices a similar position:

                Contractors shall adopt appropriate personnel procedures to deal with employees who
        are found to be using drugs illegally. Contractors shall not allow any employee to remain on
        duty or perform in a sensitive position [defined in part as a job impacting health or safety or
        requiring a high degree of trust or confidence] who is found to use illegal drugs until such
        times as the Contractor, in accordance with procedures established by the Contractor,
        determines that the employee may perform in such a position.

48 C.F.R. 252.223-7004(d) (1992).

        The recently enacted Americans with Disabilities Act ("ADA"), 42 U.S.C. §§ 12101-12213,

is also instructive. While broadening employment opportunities for millions of disabled workers, the

ADA affirmatively excludes from protection persons who are using drugs: "For purposes of this

chapter, the term "individual with a disability' does not include an individual who is currently engaging

in the illegal use of drugs[.]" Id. § 12114. By placing drug users outside the ADA's protective ambit,

Congress explicitly refused to open employment doors for them.

2. state statutes

        Statutes enacted by Texas further define the dominant public policy favoring a drug-free

society.   For example, Texas Revised Civil Statutes Annotated article 8308-7.10(a) (West

Supp.1993), styled Policies for elimination of drugs in the workplace, mandates the following: "Each

employer who has 15 or more employees and who maintains workers' compensation insurance

coverage shall adopt a policy designed to eliminate drug abuse and its effects in the workplace."

Another statutory provision, which requires state agencies to report equal employment opportunity

data concerning handicapped persons to the governor's office, specifically excludes from the definition

of "handicapped person" anyone "who is addicted to the use of alcohol or to a drug or other

controlled substance." TEX.REV.CIV.STAT.ANN. art. 6252-16b, § 1 (West Supp.1993). Likewise,

the state's Commission on Human Rights Act, enacted "to secure for persons within the state freedom

from discrimination in certain transactions concerning employment ... [and] to preserve the public

safety, health, and general welfare," affirmatively states that "disability" does not include "a person
with a current condition of addiction to the use of alcohol or any drug or illegal or federally controlled

substance[.]" TEX.REV.CIV.STAT.ANN. art. 5221k, §§ 1.02(2) and 2.01(4)(A) (West Supp.1993).

3. various regulations

        Additionally, we refer to examples of the innumerable regulations from various governmental

agencies concerning drug testing programs as further demonstrating our current national policy. The

Department of Transportation has promulgated comprehensive regulations arguably applicable to

Woods mandating anti-drug programs for workers stationed on petro-chemical pipelines. 49 C.F.R.

§ 199 (1991). Many other regulations echo the concern. See, e.g., Control of Alcohol and Drug Use,

49 C.F.R. § 219 (1992) (Federal Railroad Administration); Federal Aviation Administration Drug

Testing Program, 14 C.F.R. § 121, Appendix I (1992); Fitness For Duty Programs, 10 C.F.R. § 26

(1993) (Nuclear Regulatory Commission); Department of Defense Drug Abuse Testing Program,

32 C.F.R. § 60 (1992); Procedures for Transportation Workplace Drug Testing Programs, 49 C.F.R.

§ 40 (1992) (Department of Transportation).

        More generally, pursuant to a presidential initiative to establish drug-free workplaces,

Executive Order No. 12564 (reprinted in 5 U.S.C. § 7301 note) requires every federal executive

agency to establish a random testing program for civilian employees who hold safety- and

security-related positions.8

4. judicial decisions

        An abundance of judicial decisions condemn the presence of drugs in the workplace. Misco,

for example, although the Supreme Court took issue with the failure to formulate the invoked policy


   8
    The Order, which forbids illegal drug use by federal employees both on and off duty,
specifically recognized that,

                        Drug use is having serious adverse effects upon a significant proportion of
                the national work force and results in billions of dollars of lost productivity each
                year;

                        The Federal government, as the largest employer in the Nation, can and
                should show the way towards achieving drug-free workplaces through a program
                designed to offer drug users a helping hand and, at the same time, demonstrating
                to drug users and potential drug users that drugs will not be tolerated in the
                Federal workplace[.]
with precision, noted that our view that public policy condemns the operation of dangerous machinery

by workers using drugs or alcohol "is firmly rooted in common sense." 484 U.S. at 44, 108 S.Ct. at

374; see also, Oil Workers Loc. 4-228 v. Union Oil Co. of Cal., 818 F.2d 437, 442 (5th Cir.1987)

(recognizing this Circuit's strong public policy against the operation of dangerous machinery by

persons using drugs or alcohol). Other jurisdictions are in accord. In a case involving a papermill

worker who possessed marihuana on company premises, the First Circuit specifically "conclude[d]

that there is a well-defined public policy against the use of drugs in the workplace." S.D. Warren

Company v. United Paper Workers Int'l Union, 815 F.2d 178, 186 (1st Cir.) ("Warren I "), vacated,

484 U.S. 983, 108 S.Ct. 497, 98 L.Ed.2d 496 (1987), on remand, 845 F.2d 3 (1st Cir.) ("Warren II

"), cert. denied, 488 U.S. 992, 109 S.Ct. 555, 102 L.Ed.2d 582 (1988). In language pertinent to the

case before us, the Court observed:

                There are laws against the sale and use of drugs enacted by all states, ... and the sale
       and use of drugs is a serious offense under federal laws. [citations omitted]. Furthermore,
       the nation has focused on the corrosive consequences of drug sale and use and has devoted
       itself to their eradication. In particular, the work shop is a place where such usage is
       abominable not only because of the health hazard it creates, but also because it creates an
       unsafe atmosphere and is deteriorative of production, the quality of the products, and
       competition.

815 F.2d at 186.9

       As we have noted previo usly, petro-chemical refineries are dangerous places; there is no

margin for error. See Union Oil, 818 F.2d at 439, 441 n. 3 (affirming the arbitrator's emphasis on

"the danger inherent in the oil refinery work environment" where "fires and explosions often occur

... with calamitous and costly results"). Woods's duties as a process technician at the refinery

involved the potential handling of high-pressure and high-temperature liquids and gases. Such


   9
     Upon remand for further consideration in light of Misco, the First Circuit in Warren II did not
reaffirm specifically the Warren I holding that vacated the arbitration award on public policy
grounds. Instead, the Court chose not to revisit the public policy issue and "assume[d] without
deciding" that Misco foreclosed the alternate public policy basis for its earlier decision. Warren
II, 845 F.2d at 7. Instead, Warren II relied upon the arbitrator's usurpation of authority in
ignoring the contract's plain language that granted management the sole right to discharge
employees for cause and removed from the arbitrator the authority to fashion a remedy once
certain rules were broken. It was careful, however, to highlight a post-Misco case from the
Eighth Circuit which relied upon Warren I as a basis for refusing to enforce an arbitration award
on public policy grounds. See Iowa Elec., 834 F.2d at 1428.
assignments have the capacity to place thousands of people, as well as the surrounding environment,

at risk.10 As Arbitrator Grimes remarked in an arbitration involving a petro-chemical facility,

        [Refineries have] the responsibility to the community, its owners and its employees to provide
        a safe work environment. Given the nature of the products handled in a refinery, particularly
        those in operations where t he most volatile and hence more explosive gases and fluids are
        produced, an accident which can result from a seemingly insignificant misstep can produce
        a catastrophe.

Marathon Petroleum Co., 89 Lab.Arb. 716, 722 (1987).

        Woods's position is rightly characterized as safety-sensitive. And federal courts have with

some frequency overturned awards of reinstatement on public policy grounds where, as here, public

safety was implicated. See, e.g., Amalgamated Meat Cutters v. Great Western Food Co., 712 F.2d

122, 125 (5th Cir.1983) (reversing an arbitrator's reinstatement of an over-the-road truck driver who

drank liquor while on duty); Iowa Elec., 834 F.2d at 1427-30 (refusing to reinstate a nuclear power

plant employee who had compromised a reactor safety system, despite the arbitrator's decision that

discharge was too harsh a sanction); Delta Air Lines, Inc. v. Air Line Pilots Ass'n, Int'l, 861 F.2d

665, 666-68 (11th Cir.1988) (striking down an award t hat reinstated a pilot who flew while

intoxicated), cert. denied, 493 U.S. 871, 110 S.Ct. 201, 107 L.Ed.2d 154 (1989); Georgia Power

Co. v. IBEW, Local 84, 707 F.Supp. 531, 533-34 (N.D.Ga.1989) (refusi ng to reinstate a power

company employee who was a chronic drug user and who was responsible for monitoring various

meters and gauges to ensure that high pressure equipment did not overheat), aff'd, 896 F.2d 507

(11th Cir.1990).

        The Supreme Court has approved of drug testing for employees in safety-sensitive jobs.

Skinner v. Railway Labor Executives' Ass'n, 489 U.S. 602, 621, 109 S.Ct. 1402, 1415, 103 L.Ed.2d

639 (1989) (noting that Government has a strong interest in preventing railroad personnel "from using

alcohol or drugs while on duty, or while subject to being called for duty" so as to ensure the safety

of the public and of the employees themselves); National Treasury Employees Union v. Von Raab,

489 U.S. 656, 670, 109 S.Ct. 1384, 1393-94, 103 L.Ed.2d 685 (1989) (recognizing that

   10
     The Baytown refinery operates in a community of over 60,000 residents. Moreover,
according to Exxon, "the refinery sits on the banks of the Houston Ship Channel, an
environmentally sensitive waterway that feeds into the Gulf of Mexico."
Government's interest in guarding against on-the-job impairment justifies the imposition of

suspicionless drug-testing of certain customs agents).

         We hold that the above-cited authorities, viewed particularly in light of Woods's efforts to

conceal his drug use, represent a valid expression of a "well defined and dominant" public policy. The

delineation of public policy does not fall short by consisting only of "general considerations of

supposed public interests."

        To be sure, various courts have adhered to a narrow construction of the public policy

exception and have refused to disturb an arbitrator's bargained-for judgment on public policy grounds.

GCIWU relies primarily upon two decisions for its position that Woods's reinstatement does not

breach public policy. First, it cites Stead Motors of Walnut Creek v. Automotive Machinists Lodge

No. 1173, Int'l Ass'n of Machinists and Aerospace Workers, 886 F.2d 1200, 1216-17 (9th Cir.1989)

(en banc ), cert. denied, 495 U.S. 946, 110 S.Ct. 2205, 109 L.Ed.2d 531 (1990). In Stead, a plurality

of the en banc Ninth Circuit found no dominant public policy barring the reinstatement of an auto

mechanic who recklessly failed to tighten a car's lug bolts. Drug use was not involved in the case.

In a severely split decision, the Stead plurality held that the materials relied upon by the original panel,

California code provisions regarding auto safety and maintenance, were insufficient to form an

explicit, well-defined, public policy. Without expressly saying so, the plurality opinion also strongly

suggests that unless the award itself constitutes a clear violation of positive law, courts are powerless

to intervene—a question left purposefully unresolved by the Supreme Court in Misco, 484 U.S. at

45, n. 12, 108 S.Ct. at 374-75, n. 12, and expressly rejected by this Court.

         Moreover, the plurality states a rule of construction that a grievant's "amenability to

discipline" cannot be second-guessed by a reviewing court, whatever the policy issue at stake. Stead,

886 F.2d at 1213 (citing dicta from Misco, 484 U.S. at 44-45, 108 S.Ct. at 374). We reject such a

restrictive test, which would have the practical effect of ousting the courts of jurisdiction and

abdicating the public policy quest ion entirely to arbitrators. Under the plurality's problematic

decision, if an arbitrator finds the discharged employee amenable to discipline and therefore unlikely

to breach a properly-framed public policy in the future, such a determination would be unreviewable.
Our reading of Misco does not compel such a "hands-off" policy. The plurality's rule of no judicial

power to evaluat e amenability does not comport with W.R. Grace 's teaching, acknowledged in

Misco, that " "the question of public policy is ultimately one for resolution by the courts.' " 484 U.S.

at 43, 108 S.Ct. at 373 (quoting W.R. Grace, 461 U.S. at 766, 103 S.Ct. at 2183). The valuable

principle of deference to arbitration does not take us so far.

        Second, the Union cites Northwest Airlines v. Air Line Pilots Ass'n, Int'l, 808 F.2d 76

(D.C.Cir.1987), cert. denied, 486 U.S. 1014, 108 S.Ct. 1751, 100 L.Ed.2d 213 (1988), in which the

D.C. Circuit ordered the reinstatement of a commercial airline pilot who had admitted to flying his

plane while intoxicated. But Northwest Airlines includes a unique factual distinction. In that case,

the Federal Aviation Administration ("FAA") had recertified the pilot after he had completed an

alcohol rehabilitation program. FAA recertification, a condition the arbitrator made integral to his

reinstatement award, embodied a specific determination by the regulator itself that the pilot was "fit

and qualified to fly." 808 F.2d at 83. A court would certainly be hard-pressed to oppose

reinstatement where the regulatory body charged with ensuring workplace safety agrees to it. That

did not happen in the instant case. Arbitrator Helburn did not condition his reinstatement of Woods

upon a specific determination by a governmental body that Woods was fit to resume his duties at the

refinery.

        This is not just the usual case of an arbitrator's reinstatement of an errant employee. We view

as of the utmost importance in this case the fact that Woods tested positive for a drug as critical and

powerful as cocaine when he had already been through rehabilitation and was in a sense on probation.

Then, he did not notify anyone of his relapse as required, and only later did he admit his serious

breach when confronted with the test results. A conclusion requiring "another chance" and further

rehabilitation is on its face extremely risky under these unusual and uncommon circumstances. As

Arbitrator Helburn himself recognized, "Discharge is appropriate where t he employer can

demonstrate the previous use of progressive/corrective discipline to no avail." The reinstatement of

such a worker is not compelled by Misco, and we find no judicial decisio n requiring upholding an

arbitrator's awarding of reinstatement to such an employee.
        The record does not show that Woods was impaired while on duty or that he used cocaine

on Exxon's premises. This circumstance, however, does not control in the light of Woods's sensitive

position and his attempts to conceal his drug use. Woods's duplicity in hiding his violation of the

after-care agreement obviously increases the risk of future violations. Also, the arbitrator ordered

Woods be restored to his previous safety-sensitive position. Exxon was not allowed to consider

placing him in a less dangerous assignment. In Misco, the Supreme Court made reference to the

provision of the award that permitted the company to transfer the grievant to a different equivalent

job, remarking that it was unclear that the worker "would pose a serious threat to [himself and others]

in every job for which he was qualified." 484 U.S. at 45, 108 S.Ct. at 374. In the case before us, no

such discretion exists; Woods was ordered to be returned to his former position as a process

technician.11

        As stated above, courts are the ultimate arbiters of public policy in the arbitration context.

This case present s us with public policy favoring a safe and drug-free workplace as expressed in

countless governmental directives and judicial decisions. Mr. Woods was a employee who tested

positive for cocaine while on the job, who had already taken advantage of his company's

rehabilitation-focused treatment program only to breach the after-care contract on two occasions

(excusing his failure to report the relapse only because he felt "too embarrassed" by it), and who had

refused to admit his drug use until the test results later came back positive. We conclude that

compelled continued employment of Woods in a safety-sensitive position is sufficient to represent a

plain violation of "well defined and dominant" public policy. The summary judgment in favor of

Exxon is properly supported on this basis.




   11
      Other courts have noted that companies could face extraordinary liability if, despite proven
instances of deception regarding the company's drug policy, they nevertheless restored violators
to their sensitive positions. See, e.g., Georgia Power, 707 F.Supp. at 536 n. 4, 538 (remarking
that reinstatement could potentially expose the employer to liability for damages caused by a
worker's future drug use). See also, e.g., Usery v. Marquette Cement Mfg. Co., 568 F.2d 902,
910 (2d Cir.1977) (stating that employers are liable for those hazards caused by their employees if
the dangers were foreseeable and preventable).
B. Consideration of Post-Discharge Conduct12

         As an alternative basis for vacating the arbitrator's award, Exxon also contends that the

arbitrator below improperly considered "post-discharge good works" as a basis for reinstating

Woods. As a result, argues Exxon, the arbitrator exceeded the scope of his authority under t he

contract. Specifically, the arbitrator considered and relied upon several assertions regarding Woods's

post-discharge behavior, including (1) his post-relapse drug and alcohol abstinence, (2) his ability to

hold a job, (3) his realization that he must live "one day at a time." In sum, the arbitrator considered

these factors in making his just cause determination and in concluding that Woods represented "a

good bet for successful rehabilitation so that discharge is not justified at this point in his treatment."

For its part, the Union urges strenuously that an arbitrator may properly condition his just cause

determination on numerous factors, even those that arise after termination.

        In considering this issue, we are guided by our prior recognition that, to "draw its essence"

from the contract, "an [arbitrator's] award must have a basis that is at least rationally inferable, if not

obviously drawn, from the letter or purpose of the collective bargaining agreement.... [T]he award

must, in some logical way, be derived from the wording or purpose of the contract[.]" Loc. U. 59,

Int. Bro. of Elec. Wkrs. v. Green Corp., 725 F.2d 264, 268 (5th Cir.) (citation omitted), cert. denied,

469 U.S. 833, 105 S.Ct. 124, 83 L.Ed.2d 66 (1984).

        The inquiry is straightforward: should the arbitrator have relied upon evidence of events that

occurred after Woods's discharge? Once again, the Supreme Court's decision in Misco provides

important guidance. In Misco, the arbitrator refused to consider evidence unknown to the company

at the time the grievant was fired. The Court noted that the arbitrator's refusal was merely a

construction of what the agreement required when deciding discharge cases: "an arbitrator was to

look only at the evidence before the employer at the time of discharge. As the arbitrator noted, this

approach was consistent with the practice followed by other arbitrators." 484 U.S. at 39-40, 108

   12
     GCIWU argues that Exxon has waived its objection to the arbitrator's consideration of
Woods's post-discharge conduct by not lodging a proper objection either at the grievance hearing
or in its post-hearing brief. But given that arbitrators typically receive evidence liberally and do
not feel constrained by strict applications of the rules of evidence, Exxon is not precluded from
arguing this point on appeal in a de novo review.
S.Ct. at 371. The Court elaborated in an accompanying footnote:

                 Labor arbitrators have stated that the correctness of a discharge "must stand or fall
        upon the reason given at the time of discharge," see, e.g., West Va. Pulp & Paper Co., 10
        Lab.Arb. 117, 118 (1947), and arbitrators often, but not always, confine their considerations
        to the facts known to the employer at the time of the discharge. O. Fairweather, Practice and
        Procedure in Labor Arbitration 303-306 (2d ed. 1983); F. Elkouri & E. Elkouri, How
        Arbitration Works 634-635 (3d ed. 1973).

484 U.S. at 40 n. 8, 108 S.Ct. at 371-72 n. 8.

        In the instant case, Article Twenty-Six of the applicable collective bargaining agreement

provides that Exxon "shall have the right to discipline and discharge employees for just cause."

Arbitrator Helburn was presented with this stipulated issue: "Was Thomas W. Woods discharged for

just cause and, if not, what is the appropriate remedy?" The first part of the question is worded in

the past tense. It is equivalent to asking, "Did Exxon possess just cause on June 15, 1990 to

terminate Thomas W. Woods?" Upon a careful review of the applicable legal principles and the terms

of the parties' collective bargaining agreement, which strips the arbitrator of authority "to alter or add

to it in any way," we hold that the arbitrator should have confined his considerations only to the facts

as they existed at the time Exxon made its termination decision.

        This decision is supported by most of the caselaw. As noted above, the Misco Court recently

affirmed an arbitrator's refusal to consider evidence not relied upon by the company at the time of

discharge. 484 U.S. at 39-40, 108 S.Ct. at 371. The Eleventh Circuit is in accord. In Delta Airlines,

which concerned a pilot terminated for flying while intoxicated, the court held that one basis for its

reversal of the arbitration board's reinstatement award was the board's improper consideration of the

grievant's post-discharge conduct. Specifically, the Arbitration Board, while finding that the pilot

"did commit a dischargeable offense," nonetheless found an absence of just cause for the termination

in part because, "after discharge and after rejection of his grievance," the alcoholic pilot had sought

rehabilitation. 861 F.2d at 668, 669. For guidance, the Court turned to one of its previous decisions,

Butterkrust Bakeries v. Bakery, Conf. & Tobacco Wkrs., 726 F.2d 698 (11th Cir.1984), and

reasoned:

               Butterkrust holds that an arbitrator is bound t o decide just cause for discharge, vel
        non, at the time of discharge. The arbit rator's responsibility is discharged upon his
        determination of the existence of just cause. If this finding has been made, the arbitrator is
        not authorized to employ "his own brand of industrial justice" and decide what post
        discharge good works would entitle the properly discharged employee to rehire. While the
        arbitrator ... may be an actual or potentially excellent personnel expert, his opinion as to what
        employment opportunities one ought to have if he or she, after discharge, constructively
        addresses the problems that lead to discharge is not pertinent to the arbitration duties. The
        arbitrator's effort to impose his views on that subject upon the parties to the arbitration
        amounts to his basing his decision upon "his own brand of industrial justice," which is
        forbidden.

Delta Airlines, 861 F.2d at 669 (emphasis added).

        Mobil Oil Corp. v. Independent Oil Workers Union, 679 F.2d 299 (3d Cir.1982), points to

an important application of the basic principle. Mobil concerned a mentally disturbed grievant who

was terminated because he fought on the job and had a poor work record. At the ti me Mobil

discharged the worker, it was unaware of his mental disorder. The arbitrator nevertheless concluded

that "cause" should be construed objectively and not governed by the subjective standard of what

Mobil actually knew when it fired the employee. The arbitrator considered an array of information,

including medical and other evidence, that came to light after the discharge. The Court upheld

consideration of this evidence by the arbitrator although it was not within Mobil's knowledge on the

date the grievant was fired. The Court, however, properly stressed its continued adherence to the

rule that "an arbitrator may not rely on an employee's subsequent rehabilitation to order

reinstatement." Id. at 303 (citing American Honda Motor Co. v. Local 585, UAW, No. 79-1231,

(E.D.Pa. July 20, 1979), aff'd mem., 615 F.2d 1352 (3d Cir.1980)). The established rule was not

violated because the arbitrator considered only later-discovered evidence which established the

situation at the time of discharge, not evidence of later changes in the situation.

        In the instant case, instead, the arbitrator relied heavily upon circumstances regarding Woods's

post-discharge rehabilitation efforts. Such reliance was a departure from his authority under the

contract. The Union looks principally to a Ninth Circuit decision for the proposition that an arbitrator

can rightfully consider post-discharge conduct in reaching his decision. See Intern. Ass'n of

Machinists v. San Diego Marine, 620 F.2d 736 (9th Cir.1980). But that case actually favors Exxon's

position. In San Diego Marine, the company argued that a reinstatement award should be vacated

because the arbitrator considered evidence regarding the company's improper behavior at a

post-termination grievance meeting. On appeal, the Ninth Circuit refused to disturb the arbitrator's
reinstatement award because "[u]nlike the arbitrator in [Delta Lines, Inc. v. Teamsters Local 468,

66 Cal.App.3d 960, 136 Cal.Rptr. 345 (1977) ] ... this arbitrator did not state that he was reaching

his decision because of post-termination conduct of the Company. Rather, the arbitrator seems to

have reached his conclusion in light of all the circumstances surrounding the discharge." Id. at 739

(emphasis added). The arbitrator's decision was upheld because it was not based upon the company's

post-termination conduct.

       Although we are mindful of the Supreme Court's time-honored admonition that merely an

"inference that the arbitrator may have exceeded his authority, is not a reason for refusing to enforce

the award," Steelworkers v. Enterprise Wheel & Car, Corp., 363 U.S. 593, 598, 80 S.Ct. 1358, 1361,

4 L.Ed.2d 1424 (1960) (emphasis added), the arbitrator's decision in this case goes beyond mere

surmise or intimation. He did properly consider Woods's long-time record with Exxon as a basis for

reinstatement. His principal basis for believing Woods would benefit from a lesser sanction, however,

was stated this way: "I am impressed that he testified honestly and since his relapse he seemingly

has learned better how to deal with his environment. He has attended AA meetings, held a job and

learned to live "one day at a time,' which he must do if he is to control his dependancy [sic]."

(emphasis added). Such heavy reliance upon Woods's post-relapse behavior defeats the normal

presumption urging us to uphold an award when its underlying reasoning is merely ambiguous. 363

U.S. at 598, 80 S.Ct. at 1361.

       Accordingly, we conclude that the arbitrator's award must be vacated also on this alternative

ground.

                                          CONCLUSION

       On the facts before us, we conclude that reinstatement of a worker to his safety-sensitive

position after having breached his after-care agreement would eviscerate the "well defined and

dominant" public policy underlying our nation's efforts to promote a workplace free of drugs and

alcohol. This is particularly true concerning industries that, like petro-chemical refineries, have the

capacity to impact public safety. Moreover, the arbitrator erred in basing his decision upon several

conclusions concerning Woods's post-termination conduct. In exercising such reliance, Arbitrator
Helburn exceeded his proper, contracted-for authority.

       The arbitrator's award reinstating Thomas Woods was properly set aside.

       AFFIRMED.

                                           ******
