The Wilton Rancheria, a Native American tribe, appealed a district court order that denied its motion to vacate an arbitration award. The underlying dispute involved the procedure for electing a collective bargaining representative for the UNITE HERE International Union. The parties had a 2017 Memorandum of Agreement (MOA) that referenced election procedures. The Tribe argued that the Union was required to use the election procedure established by the Tribal Labor Relations Ordinance (TLRO) rather than the procedure outlined in the MOA. The arbitrator ruled that the Tribe must cooperate with the Union's attempts to use the MOA election procedure, rejecting the Tribe's argument that the TLRO procedure was the exclusive method. The Tribe then sought to vacate this award in federal court, claiming the arbitrator had disregarded the law.
The Ninth Circuit reviewed the district court's denial of the motion to vacate de novo. The court emphasized that under the Federal Arbitration Act, federal courts review arbitration awards with extreme deference. An award can only be vacated if it is 'completely irrational' or constitutes a 'manifest disregard of the law.' The court clarified that mere failures to understand or apply the law, even misinterpretations, do not meet this high standard. The court found that the parties had explicitly authorized the arbitrator to decide whether the Union had to use the TLRO procedure or the MOA procedure. The arbitrator focused on this 'essential dispute' and concluded that compliance with the MOA did not preclude other provisions. The arbitrator found the Tribe's argument—that the MOA language incorporating the TLRO meant the Union agreed to follow the TLRO exclusively—to be 'unconvincing' and 'implausible.' The arbitrator reasoned that similar TLROs had never been interpreted to override MOA election procedures and that reading the TLRO as exclusive would render the MOA's alternative procedure provisions as surplusage. The Ninth Circuit held that this reasoning did not involve recognizing the applicable law and then ignoring it, nor was it completely irrational for failing to draw its essence from the agreement. Instead, the arbitrator was drawing from the essence of the agreement by giving effect to each of its provisions. The court noted that the arbitrator's analysis of the second ground of his decision sufficed to support the conclusion, so the court did not reach the third ground regarding whether the TLRO was a law made by the Tribe as a sovereign.
The arbitration award requiring the Wilton Rancheria to cooperate with the UNITE HERE Union's election procedure under the 2017 Memorandum of Agreement remains binding. The decision reinforces the high bar for vacating arbitration awards under the Federal Arbitration Act, confirming that arbitrators have broad authority to interpret agreements and that courts will not overturn awards simply because they might have interpreted the law differently. The Tribe must now comply with the Union's efforts to use the MOA election procedure.
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