After the Exxon Valdez disaster, Exxon implemented a strict policy of testing its employees who served on tankers for drug and alcohol use. The policy allowed a manager to immediately discharge any employee who was intoxicated at the time of duty aboard the ship. Fris, an employee who boarded the ship while intoxicated, was discharged when his manager determined that he was unfit for work. However, Fris’s union contract allowed him to appeal the discharge through an arbitration procedure. The arbitration panel ordered Fris reinstated, and Exxon filed suit in a federal court to have the arbitration set aside on the basis that the arbitration order violated public policy and would subject Exxon to liability should Fris act negligently while intoxicated. The Union argued that the court should give deference to the arbitration system articulated in the union contract.

CASE QUESTIONS

1. Who prevails and why?

2. In what way is this case similar to a case you read in this chapter?