Of Words and Contracts: Arbitration and Lexicology

Dispute Resolution Journal, May-Jul 2005 by Dilts, David A

Plain Meaning Rule

The "plain meaning rule" is this: When the language of a contract is clear and unequivocal, the arbitrator must apply it, and no interpretation is necessary beyond the simple application of the unambiguous language.8 In other words, no other evidence is needed to construe the agreement. As noted above, Black's Law Dictionary does not require an ambiguity to present itself before "construction" of a contract is necessary. The absence of an ambiguity requirement is consistent with the critical view many scholars take of the plain meaning rule. Critics argue that in contract interpretation, words are not subject to natural laws of science, requiring a fixed understanding from their readers. By contrast, the Barron's definition of "construction" appears to make ambiguity a pre-requisite to applying the plain meaning rule. In other words, no construction is necessary without ambiguity. The lexicology of the word "construction" in two respected legal dictionaries reflects substantive differences observed in the labor arbitration literature.

Theodore J. St. Antoine, former president of the National Academy of Arbitrators, said of the plain meaning rule as applied to collective bargaining agreements:

I would reject the broad reach of the plain meaning rule. Regardless of whether contract language appears clear and unambiguous on its face, I would admit all credible evidence, within the constraints of procedural feasibility at a hearing, that goes to the actual intent of the parties. Second, in spite of seemingly clear, unambiguous contract terms, I would accept proofs of well-established, mutually accepted practices that indicate a modification or amendment of those provisions. In so doing I am most emphatically not trying to elevate the arbitrator over the parties. My aim is to be faithful to the parties' manifest intent in the deepest, truest sense.9

When construing collective bargaining agreements, it is axiomatic that an arbitrator's award must "draw its essence from the contract."10 There are many sources of guidance upon which an arbitrator may glean the essence of a contract. Some of these sources are past practice in the industry,11 bargaining history,12 and industry custom.13 It is the parties' mutual intent that the arbitrator is obliged to determine in order to resolve the parties' dispute. Technical legal rules are not normally regarded as taking precedence over probative evidence of the parties' mutual intent.

The Elkouris discuss the use of dictionaries as sources of meaning for arbitrators in How Arbitration Works:14

Arbitrators often have ruled that, in the absence of a showing of mutual understanding of the parties to the contrary, the usual and ordinary definition of terms as defined by a reliable dictionary should govern. The use of dictionary definitions in arbitral opinions provides a neutral interpretation of a word or phrase that carries the air of authority. If the parties have defined a word or phrase in their agreement, however, an arbitrator should not look outside the agreement for a definition....