Of Words and Contracts: Arbitration and Lexicology

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

Practical Implications

In the Combustion Engineering case, arbitrator John Murphy was faced with deciding whether a two-week plant shutdown was a layoff for purposes of the parties' collective bargaining agreement. In determining the meaning of the term "layoff," he attempted to glean the usual and ordinary meaning of the word by consulting several sources. His research was documented in his award:16

The term "layoff" is not given a special definition in the contract, and therefore it must be assumed that the parties intended it to have the usual and customary meaning. Webster's Third New International (Unabridged) Dictionary defines the verb as "to halt or suspend operation of (as a mill or factory)" and "to cease to employ (a worker) usually temporarily because of slack in production and without prejudice to the worker-usually distinguished from fire." It defines the noun as "a period of being away from or out of work" and gives as a synonym "shut-down."

Arbitrator Murphy also consulted Commerce Clearing House's Labor Relations Reporter, the Bureau of National Affairs' Labor Relations Expediter, and a labor arbitration case in which the term "layoff" was in controversy17 to determine whether the definition provided by Webster's was consistent with the customary understanding of that word in labor-relations matters. He found that the term "layoff" was consistently defined in these three authorities and noted that in the labor arbitration case, the arbitrator determined the usual and ordinary meaning of the term. With the construction of that term established, Arbitrator Murphy was able to apply it to the contract and reach a proper resolution of the dispute.

While it might be desirable for arbitrators always to thoroughly research the meaning of contract terms, it is more likely that they aren't always able to display as much diligence as Arbitrator Murphy did in the Combustion Engineering case. His lexicology was exemplary. But more often, arbitrators are likely to look up the word in their personal dictionary and use that definition to determine the word's usual and ordinary meaning.18 However, there is evidence that arbitrators also consult a legal dictionary in addition to a general purpose dictionary to aid them in construing contract terms.19 The Elkouris noted at least one arbitrator who looked exclusively to other collective bargaining agreements to ascertain the customary meaning of a disputed word.20

Thus, there seems to be considerable variation in the way arbitrators go about construing contract terms, with Arbitrator Murphy's perhaps being the most diligent. In other words, there is no single method of lexicological investigation that arbitrators use. Different arbitrators are likely to consult one or more authorities and, in some cases different types of authorities. The diversity in methodology could give rise to a variety of different meanings in particular cases, which might be far from what the original negotiators envisioned.

Primacy of the Parties' Mutual Intent