WASHINGTON METROPOLITAN AREA TRANSIT AUTHORITY, Petitioner & Counter-Defendant,
LOCAL 2, OFFICE AND PROFESSIONAL EMPLOYEES INTERNATIONAL UNION, AFL-CIO, Respondent & Counter-Claimant. Re Document Nos. 13, 14
RUDOLPH CONTRERAS United States District Judge.
Granting in Part and Denying in Part Respondent’s Motion to Dismiss; and Granting in Part and Denying in part Petitioner’s Motion for Summary Judgment.
This matter comes before the Court following the parties’ negotiation impasse and subsequent arbitration over the terms of a collective bargaining agreement. The petitioner is a local, public mass transit authority formed pursuant to an interstate compact; the respondent is a union of approximately 700 of the petitioner’s employees. After an extensive arbitration process spanning over one year and a record of more than 400 exhibits, the three-member arbitration board issued an award that included, among other things, general wage increases, new subcontracting terms, and new pay bands. The transit authority filed a petition in this Court seeking vacatur of three award provisions, and the union filed a counterclaim seeking confirmation of the entire award. The parties have each filed motions to dispose of the case in their favor. For the reasons discussed below, the Court will vacate the award’s peopling of the new pay bands and confirm the remainder of the award.
II. FACTUAL BACKGROUND
A. The Parties and the Compact
Petitioner, the Washington Metropolitan Area Transit Authority (“WMATA” or the “Authority”), is a mass transit facilitator in the Washington metropolitan area that operates the Metrorail, Metrobus, and MetroAccess transportation services. WMATA was established as the result of an interstate compact (the “Compact”) between the State of Maryland, the District of Columbia, and the Commonwealth of Virginia in order to provide a coordinated approach to transportation, growth, and development in the D.C. area. See generally Act of Nov. 6, 1966, Pub. L. No. 89-774, 80 Stat. 1324 (codified as amended at Md. Code Ann., Transp. § 10-204 (Michie 2008), D.C. Code §§ 9-1103.01 to .02, 9-1107.01 (2001), and Va. Code Ann. §§ 56-529 to 56-530 (2003)) (granting congressional consent for the Compact). It operates within the District of Columbia and various counties and cities within Maryland and Virginia (collectively with the federal government, the “Compact Jurisdictions”).
The Compact sets forth WMATA’s powers and responsibilities. With respect to financing, the Compact provides that “as far as possible, the payment of all costs shall be borne by the persons using or benefiting from the Authority’s facilities and services . . . .” Compact § 16. Any remaining costs are to be “equitably shared” among the Compact Jurisdictions, with the allocation “determined by agreement among them . . . .” Id. Evidence put forward by WMATA suggests that, under this funding paradigm, the Authority uses complex formulas to determine the amount each Compact Jurisdiction should contribute. See J.A. 511 (Arb. Tr. 1238:20–1239:20, July 16, 2010). In recent years, subsidies from the Compact Jurisdictions have provided about 40 percent of the revenue for WMATA’s operating budget. See, e.g., J.A. 5356 (FY2009). WMATA’s infrastructure is supported by a separate budget, known as the capital budget. See, e.g., Compact § 23; J.A. 211 (Arb. Tr. 539:1–540:1, July 12, 2010).
In addition to setting guidelines regarding WMATA’s financing, the Compact also authorizes the Authority to exercise certain enumerated powers, including the ability to construct, acquire, and sell real property; enter into and perform contracts; create and abolish offices, employments, and positions; contract for or employ professional services; and hold public hearings. See Compact § 12. The Compact also recognizes the role of labor unions and requires the Authority to negotiate with such unions regarding “wages, salaries, hours, working conditions, and pension or retirement provisions.” Id. § 66(b). Where negotiation of any “labor dispute” does not result in a collective bargaining agreement (“CBA”), the parties must submit the dispute to arbitration in which a three-member arbitration panel sets the terms to be included in the CBA. See Id . § 66(c). The arbitration process also applies to the interpretation or application of existing CBAs. See id.
The Office and Professional Employees International Union, Local 2 (“Local 2” or the “Union”) is a labor union of WMATA employees whose job responsibilities encompass a variety of professional technical, clerical, and administrative duties, including engineering, inspection, and communications. See generally J.A. 3 (Arb. Tr. 9:19–21, July 8, 2010); J.A. 1225–31. The approximately 709 Local 2 members comprise about 7 percent of WMATA’s total workforce. See J.A. 3810. Local 2 is an affiliate of the American Federation of Labor and Congress of Industrial Organizations. See Pet. Vacate Arb. Award ¶ 3, ECF No. 1.
B. Collective Bargaining
The most recent CBA between WMATA and Local 2 expired on June 30, 2008. See J.A. 1052. As that CBA came to an end, the parties began the negotiations for the next contract but made little progress. See J.A. 3 (Arb. Tr. 11:1–5, July 8, 2010). In May 2010, nearly two years after the prior CBA had expired, the parties submitted their final offers to arbitration under the terms of the Compact. See J.A. 1181–200.
1. The Kasher Arbitration (Local 689)
Before engaging in negotiations with Local 2, WMATA bargained with the Amalgamated Transit Union Local 689 (“Local 689”), whose CBA had also expired on June 30, 2008. See WMATA v. Local 689, Amalgamated Transit Union (Local 689 I), 818 F.Supp.2d 888, 892 (D. Md. 2011). Local 689 is the largest WMATA employee labor union, representing approximately 7, 700 employees comprising about 70 percent of WMATA’s workforce. See Id . Due to similarities between WMATA’s bargaining history with Local 689 and its bargaining with Local 2, the Court finds it appropriate to begin with a discussion of the Local 689 negotiations, which, like the instant case, resulted in arbitration under the Compact and judicial review in federal court.
After WMATA’s negotiations with Local 689 reached an impasse in August 2008, the parties submitted the dispute to arbitration pursuant to the Compact. The arbitration board was composed of three members: Thomas R. Roth as Local 689’s representative, R. Theodore Clark, Jr. as WMATA’s representative, and Richard R. Kasher as Neutral Chairman (collectively, the “Kasher Board”). See Id . On November 4, 2009, the Kasher Board issued its award (the “Kasher Award”), which included the following general wage adjustments: “a 2 percent lump-sum payment effective July 1, 2008; and annual 3 percent general wage increases effective on July 1 in the years 2009, 2010, and 2011.” Id. at 892–93. The two partisan board members each issued partially dissenting opinions. See Id . at 893.
Shortly after the Kasher Award was issued, the parties filed suit in the U.S. District Court for the District of Maryland—Local 689 seeking judicial confirmation of the Kasher Award, and WMATA seeking an order vacating the award’s provisions for general wage adjustments and pension benefits. See Id . WMATA’s challenge was based on the Kasher Award’s alleged failure to comply with the National Capital Area Interest Arbitration Standards Act of 1995, tit. IV, Pub. L. No. 104-50, 109 Stat. 463 (codified as amended at 40 U.S.C. §§ 18301–04 (2006)) (the “Standards Act” or the “Act”), which had never been applied by any court but purportedly sets forth procedures governing interest arbitrations between WMATA and its unionized employees. See Local 689 I, 818 F.Supp.2d at 893–94. On cross-motions for summary judgment, Judge Peter J. Messitte remanded the award to the arbitration board with instructions to issue a supplemental opinion based on his preliminary conclusion that, whatever the Standards Act requires, the Kasher Award did not demonstrate full compliance with the Act. See Id . at 893–94 & n.4. The written award “merely declared that the Neutral Chairman had ‘given full and thorough consideration to the criteria’ outlined in the Standards Act, but failed to provide any discussion or analysis applying the statutory factors to the evidence in the record.” Id. at 893.
The Neutral Chairman issued an 8-page supplemental opinion on June 22, 2010. “Although [it] contained a brief additional discussion of the various statutory factors outlined in the Standards Act, like its predecessor it contained no detailed analysis of those factors, nor did it provide a roadmap that might direct the Court to the specific evidence the [Kasher] Board had considered and weighed in reaching its conclusions.” Id. at 894. After setting forth his detailed interpretation of the Standards Act’s requirements and finding that the supplemental opinion did not comply, Judge Messitte again remanded the award to the Kasher Board with instructions to issue a further supplemental opinion. See Id . at 906–08. The Neutral Chairman submitted a second supplemental opinion that this time mapped the submitted evidence to his conclusions, and upon renewed cross-motions for summary judgment the Maryland court upheld the Kasher Award. See WMATA v. Local 689, Amalgamated Transit Union (Local 689 II), 804 F.Supp.2d 457, 476–79 (D. Md. 2011).
2. The Moffett Arbitration (Local 2)
After the negotiations between WMATA and Local 2 reached an impasse, the parties established an arbitration panel pursuant to the Compact. The arbitration board was composed of three members: Thomas R. Roth as Local 2’s representative, Robert G. Ames as WMATA’s representative, and Kenneth E. Moffett as Neutral Chairman (collectively, the “Moffett Board” or the “Board”). See Pet. Vacate Arb. Award ¶ 20, ECF No. 1. The proceedings generated a large arbitral record, including more than 400 exhibits and over 2, 300 pages of transcript. See Id . ¶ 22.
After 11 days of hearings, the Board met for several days of executive session. On January 13, 2012, the Board issued a 28-page written award (the “Moffett Award” or the “Award”) outlining the awarded CBA terms and the reasoning for the Board’s decision, and WMATA’s partisan board member submitted an opinion dissenting in part. The Award touches upon many topics, but for purposes of this litigation its most disputed terms relate to general wage adjustments, subcontracting, and new pay bands. The Award provides for the following general wage adjustment:
Effective July 1, 2008—2% lump sum payment
Effective July 1, 2009—3% general wage increase
Effective July 1, 2010—3% general wage increase
Effective July 1, 2011—3% general wage increase
Award at 6 (footnote omitted). The awarded subcontracting terms disallow the subcontracting of work customarily performed by the Union if it would result in the layoff or reduction in compensation of a Local 2 member, and the new terms also require the formation of a joint labor–management committee to review current and future subcontracting practices and seek to bring work in-house on a cost-neutral basis. See Id . at 26. With respect to pay bands, the Board awarded terms establishing two new bands comprising the highest pay grades. See Id . at 27. Under the Award, these new bands are to be occupied by Local 2 members whose compensation has been “red circled” at salaries above the previously highest pay grade. See id.
Shortly after the Moffett Award became binding on the parties, WMATA petitioned this Court for judicial review of the Award pursuant to section 18304 of the Standards Act. See 40 U.S.C. § 18304(c) (2006). Specifically, WMATA asks the Court to vacate the general wage adjustments (and resulting pension benefit increase), the new subcontracting provisions, and the new pay band provisions. See Pet. Vacate Arb. Award ¶ 1, ECF No. 1. The petition is based on three grounds: (1) that the Moffett Board failed to comply with section 18303 of the Standards Act; (2) that the Board’s decision was arbitrary or capricious; and (3) that the Board exceeded its authority in granting the Award. See Id . ¶¶ 40–45. Local 2 filed a counterclaim seeking confirmation of the entire Moffett Award. See Answer & Countercl., ECF No. 5.
On April 16, 2012, the parties filed cross-motions to dispose of this case. Local 2’s motion to dismiss seeks confirmation of the entire Moffett Award, interest, and attorneys’ fees;WMATA’s motion for summary judgment seeks vacatur of the Award’s three challenged provisions. The parties agree that “resolution of these motions should settle all issues remaining in this case.” Joint Status Rep. 2, ECF No. 18.
III. COLLATERAL ESTOPPEL
Local 2 asserts that WMATA is collaterally estopped from challenging the validity of the wage increases awarded to Local 2 unit members, including a 2 percent lump sum in 2008 and annual 3 percent increases in 2009, 2010, and 2011, because the same increases were awarded to Local 689 in the Kasher Award and upheld by the Maryland court. Resp’t’s Reply Mem. Supp. Conf. Arb. Award 5–10, ECF No. 17. Because the argument was raised in response, WMATA did not have an opportunity to address it. Collateral estoppel is a threshold issue, see Graphic Commc’ns Int’l Union, Local 554 v. Salem–Gravure Div. of World Color Press, Inc., 843 F.2d 1490, 1493 (D.C. Cir. 1988), and so the Court will address it at the outset.
“Under collateral estoppel, once a court has decided an issue of fact or law necessary to its judgment, that decision may preclude relitigation of the issue in a suit on a different cause of action involving a party to the first case.” Allen v. McCurry, 449 U.S. 90, 94 (1980) (citing Montana v. United States, 440 U.S. 147, 153 (1979)). For collateral estoppel to apply, (1) the issue being raised must have been contested by the parties and submitted for adjudication in the prior case, (2) the issue must have been actually and necessarily determined by a court of competent jurisdiction, and (3) preclusion in the second case must not work a basic unfairness to the party bound by the first determination. See Yamaha Corp. of Am. v. United States, 961 F.2d 245, 254 (D.C. Cir. 1992). For example, in a case between two unions contesting whether parties could submit to a tripartite arbitration instead of the contractually required bipartite arbitration, the D.C. Circuit found the issue to be collaterally estopped by a Ninth Circuit opinion since the court was asked by the “same three parties” to interpret the “same CBA” on the same issue. Nat’l Post Office Mail Handlers Div. of the Laborers’ Int’l Union v. Am. Postal Workers Union, 907 F.2d 190, 192 (D.C. Cir. 1990).
This suit fails the first factor of the test for collateral estoppel because the issue raised by WMATA in this suit—namely, whether the Moffett Board’s arbitration award was arbitrary and capricious in its award of wage increases to Local 2—was not raised before the Maryland court. See generally Local 689 II, 804 F.Supp. 2d. That court was asked to review the Kasher Award for compliance with the Standards Act, not to reweigh the evidence for itself and find that WMATA could, in fact, afford to pay the awarded wage increases. See Id . at 477. Moreover, in reviewing the Kasher Award, the Maryland court reviewed an arbitral record and opinion that was specific to Local 689 and encompassed party-specific factors, including the union’s compensation as compared to others who employ similar services in the D.C. area, and the special nature of the bargaining unit’s work. Id. at 475; see also 40 U.S.C. § 18303(b) (2006). Though the court found that the Kasher Board did comply with the Standards Act when awarding the wage increases, the court’s review was specific to the “7, 700 bus drivers, train operators, mechanics and other staff” comprising Local 689, Resp’t’s Mem. Supp. Mot. Dismiss 5, ECF No. 13-1, and does not speak directly to the Moffett Board’s evaluation and opinion regarding the wage increases for Local 2’s 709 professional employees. While the terms contested in Kasher and Moffett Awards are similar, WMATA is challenging a different written arbitral opinion, which had not even been issued at the time, cites different evidence, and awards a different contract to a different union. Moreover, while the Maryland court upheld the Kasher Board’s determination that the Local 689 increases were affordable, it did not consider whether WMATA could afford the additional dollar amounts addressed in the Moffett Award—estimated at $18.7 million, see Resp’t’s Reply Mem. Supp. Conf. Arb. Award 13–14, ECF No. 17—on top of the already large Kasher Award. WMATA is not collaterally estopped from challenging the Moffett Board’s general wage adjustments.
IV. REVIEW OF THE MOFFETT AWARD
Having determined that WMATA is not collaterally estopped from bringing this action, the Court proceeds to review the Moffett Award. The petition alleges that there are three main grounds on which the Court must vacate the Moffett Award, all of which arise under the Standards Act. First, WMATA alleges that the Moffett Award provisions granting pay increases did not comply with section 18303 of the Standards Act, which requires that certain enumerated factors be considered and factual findings be made. See 40 U.S.C. § 18303 (2006); see also Id . § 18304(c)(7) (requiring a court to vacate an arbitration award if the arbitrator did not comply with section 18303). Second, WMATA challenges the general wage adjustments and subcontracting provisions on the ground that the Moffett Board’s decision was arbitrary or capricious. See Id . § 18304(c)(3). Finally, WMATA challenges the new subcontracting provisions and pay bands as exceeding the arbitrator’s powers. See Id . § 18304(c)(2). The Court will address each legal challenge in turn.
A. Applicability of the Standards Act .
The proper standard of review is a critical point of contention between the parties. As a general matter, the standard by which federal courts review arbitral awards is “among the narrowest known to the law.” Union Pac. R.R. Co. v. Sheehan, 439 U.S. 89, 91 (1978) (per curiam); accord Local 689 I, 818 F.Supp.2d at 895; see also Kurke v. Oscar Gruss & Son, Inc., 454 F.3d 350, 354 (D.C. Cir. 2006) (“As we have repeatedly recognized, judicial review of arbitral awards is extremely limited . . . .” (quoting Teamsters Local Union No. 61 v. United Parcel Serv., Inc., 272 F.3d 600, 604 (D.C. Cir. 2001)) (internal quotation marks omitted)). It is clear from the parties’ briefing that the central issue in this case is whether—and to what extent—the Standards Act dictates that a more rigorous standard of review be applied to judicial review of interest arbitration awards in which WMATA is the employer.
1. Common Law Review of Arbitral Awards
Before Congress enacted the Standards Act, the D.C. Circuit held that the common law standard governed judicial review of arbitrations between WMATA and Local 2. See Office & Prof’l Emps. Int’l Union, Local 2 v. WMATA, 724 F.2d 133, 139 (D.C. Cir. 1983). The Court therefore opens, by way of background, with a discussion of that standard.
Ordinarily, “[a] principal characteristic of the common law of labor arbitration in the United States is judicial deference to arbitral decisions.” Devine v. White, 697 F.2d 421, 435 (D.C. Cir. 1983), abrogated on other grounds by Cornelius v. Nutt, 472 U.S. 648 (1985). As the Supreme Court has held:
[I]f an arbitrator is even arguably construing or applying the contract and acting within the scope of his authority, the fact that a court is convinced he committed serious error does not suffice to overturn his decision. It is only when the arbitrator strays from interpretation and application of the agreement and effectively dispense[s] his own brand of industrial justice that his decision may be unenforceable. When an arbitrator resolves disputes regarding the application of a contract, and no dishonesty is alleged, the arbitrator’s improvident, even silly, factfinding does not provide a basis for a reviewing court to refuse to enforce the award.
Major Baseball Players Ass’n v. Garvey, 532 U.S. 504, 509 (2001) (per curiam) (second alteration in original) (citations omitted) (internal quotation marks omitted). The level of deference is even greater when a federal court reviews arbitral decisions of a procedural nature. See Teamsters Local Union No. 61 v. United Parcel Serv., Inc., 272 F.3d 600, 604 (D.C. Cir. 2001) (citing John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543, 557 (1964)).
“This extraordinarily deferential standard is essential to preserve the efficiency and finality of the labor arbitration process.” Nat’l Postal Mail Handlers Union v. Am. Postal Workers Union, 589 F.3d 437, 441 (D.C. Cir. 2009); see also United Steelworkers of Am. v. Enter. Wheel & Car Corp., 363 U.S. 593, 596 (1960) (“The federal policy of settling labor disputes by arbitration would be undermined if courts had the final say on the merits of the awards.”). With these principles in mind, courts “review an arbitral decision with the presumption that the common law standard of deference applies.” Local 2, 724 F.2d at 137. The D.C. Circuit has further noted that “[t]hese critical principles . . . can elude parties who sometimes quixotically seek to overturn labor arbitration decisions . . . .” Nat’l Postal Mail Handlers Union, 589 F.3d at 441. Up until at least the time the Standards Act went into effect, these principles applied to arbitration under the Compact as well. The D.C. Circuit once noted that, “[a]s in traditional arbitration, Compact arbitration is designed to preserve industrial peace.” Local 2, 724 F.2d at 138. And in enacting the Compact, “Congress chose words which create the expectation of finality, of decisions not subject to judicial second-guessing.” Id.
2. The Standards Act
When the D.C. Circuit originally held that the highly deferential common law standard of judicial review applied to arbitrations under the Compact, it noted in dicta that, “[o]bviously, Congress could have displaced the presumption that the standard of review be based on deference . . . in either the Compact itself or in another enactment.” Id. In 1995, Congress followed suit by enacting the Standards Act. The Act was part of a larger transportation appropriations law, see generally Act of Nov. 15, 1995, Pub. L. No. 104-50, 109 Stat. 436 (codified as amended at scattered sections of U.S.C.), and was enacted with the express purpose of “lower[ing] operating costs for public transportation in the Washington metropolitan area.” 40 U.S.C. § 18301(b) (2006). WMATA asserts that the Act “displaced the former deferential standard of review and replaced it with a specific set of requirements governing the scope of judicial review of arbitration decisions resolving the terms and conditions of employment involving [WMATA].” Pet’r’s Resp. Mot. Summ. J. 4, ECF No. 16 (internal quotation marks omitted). Local 2 argues that the deferential, common law standard survives Congress’s enactment of the Standards Act in this context. See Resp’t’s Mem. Supp. Mot. Dismiss Pet. & Conf. Arb. Award 10–11, ECF No. 13-1. WMATA’s argument hits closer to the mark, and the Court joins the District of Maryland in finding “that Congress, through the Act, did abrogate the common law of arbitration as it applies to the Compact . . . .” Local 689 I, 818 F.Supp.2d at 903.
The Court notes at the outset that the Standards Act applies only to interest arbitrations involving “an interstate compact agency operating in the national capital area . . . .” 40 U.S.C. § 18302(1) (2006). Two separate inquiries are bound up in this provision: first, whether the Act applies to the parties; and second, whether this arbitration is the type of proceeding at which the Standards Act is aimed. The Court finds—and the parties do not dispute—that both questions are resolved in the affirmative. As discussed above, WMATA “provides public transit services and . . . was established by an interstate compact to which the District of Columbia is a signatory.” Id. § 18302(3). In fact, WMATA appears to be the only entity within the Act’s purview. See also Local 689 I, 818 F.Supp.2d at 899–900 n.8. The scope of the Standards Act is further limited to exclude rights arbitrations—that is, arbitral proceedings relating to “the interpretation and application of rights arising from an existing collective bargaining agreement.” 40 U.S.C. § 18302(1)(B) (emphasis added). Because the instant case arises out of an interest arbitration—that is, a proceeding in which the arbitrator sets forth provisions to be included in a renewed collective bargaining agreement, see W. Coast Sheet Metal, Inc. v. NLRB, 938 F.2d 1356, 1357 (D.C. Cir. 1991)—the exception does not apply.
Because the Standards Act applies on its face to this arbitration, the Court must next determine whether the Act’s procedures are mandatory or permissive in their application. Section 18303 of the Standards Act uses imperative language in setting forth specific factors and guidelines for the arbitration board to follow in rendering an award. Subsection (b) provides that “[a]n arbitrator rendering an arbitration award involving the employees of [WMATA] may not make a finding or a decision for inclusion in a collective bargaining agreement governing conditions of employment without considering” seven enumerated factors (the “Factors”). 40 U.S.C. § 18303(b) (2006) (emphasis added). Subsection (c) provides that the arbitrator “may not . . . provide for salaries and other benefits that exceed the ability of [WMATA], or of any governmental jurisdiction that provides subsidy payments or budgetary assistance to [WMATA], to obtain the necessary financial resources to pay for wage and benefit increases . . . .” Id. § 18303(c) (emphasis added). And subsection (d) contains a number of mandates, requiring that (1) “the arbitrator shall issue a written award that demonstrates that all the factors set forth in subsections (b) and (c) have been considered and applied”; (2) the arbitrator “may grant an increase in pay rates or benefits . . . only if the arbitrator concludes that any costs to the agency do not adversely affect the public welfare”; and (3) “[t]he arbitrator’s conclusion regarding the public welfare must be supported by substantial evidence.” Id. § 18303(d) (emphases added).
The Act’s judicial review provision contains similarly binding language. Section 18304 mandates that:
The court shall review the award on the record, and shall vacate the award or any part of the award, after notice and a hearing, if—
(1) the award is in violation of applicable law;
(2) the arbitrator exceeded the arbitrator’s powers;
(3) the decision by the arbitrator is arbitrary or capricious;
(4) the arbitrator conducted the hearing contrary to the provisions of this chapter or other laws or rules that apply to the arbitration so as to substantially prejudice the rights of a party;
(5) there was partiality or misconduct by the arbitrator prejudicing the rights of a party;
(6) the award was procured by corruption, fraud, or bias on the part of the arbitrator; or
(7) the arbitrator did not comply with the provisions of section 18303 . . . .
Id. § 18304(c) (emphases added). The plain meaning of the statutory text thus demonstrates a clear legislative intent that the Standards Act’s procedures are mandatory, not permissive. See Zivotofsky v. Sec’y of State, 571 F.3d 1227, 1243 (D.C. Cir. 2009) (Edwards, J., concurring) (“‘Shall’ has long been understood as ‘the language of command.’” (quoting Escoe v. Zerbst, 295 U.S. 490, 493 (1935))), vacated on other grounds sub nom. Zivotofsky ex rel. Zivotofsky v. Clinton, 132 S.Ct. 1421 (2012).
The Court rejects Local 2’s assertion that the Standards Act is inapplicable because the Compact provides for “final and binding” interest arbitration. See, e.g., Answer & Countercl. ¶ 1, ECF No. 5 (citing Compact § 66). In considering whether this Compact language limits the scope of judicial review even before the Standards Act came into effect, the D.C. Circuit held that “[t]he ‘final and binding’ clause had nothing to do with judicial review.” Local 2, 724 F.2d at 138. According to the legislative history, “the clause was envisioned as a ‘no strike, no lock- out’ provision.” Id. (citing H.R. Rep. No. 92-115, at 9 (1972)). Moreover, even if the “final and binding” clause previously foreclosed heightened judicial scrutiny of arbitral awards, the D.C. Circuit noted that Congress could displace the standard of review “in another enactment.” Id.
The Standards Act therefore governs this dispute, and application of the Act’s factors is mandatory. This holding is consistent with the findings and purpose of the Standards Act, which provide that “[t]he purpose of [the Act] is to adopt standards governing arbitration that must be applied . . . in order to lower operating costs for public transportation in the Washington metropolitan area.” 40 U.S.C. § 18301(b) (emphasis added).
B. Application of the Standards Act
Having determined that the Standards Act sets forth mandatory criteria by which a court must review interest arbitration awards involving WMATA employees, the Court proceeds to review the Moffett Award pursuant to the Act. WMATA asserts that there are three independent bases on which the Court must vacate the Award: (1) that the Board failed to comply with section 18303 of the Standards Act; (2) that the Award was arbitrary or capricious; and ...