## Facts

- The Artists Agency represented Kelsey Grammer in television and motion pictures beginning in the 1980s.
- Grammer became dissatisfied because the agency obtained no motion picture projects for him and did not secure his most significant television roles.
- In January 1995, the parties executed a settlement agreement and renewal contracts governing future representation.
- The settlement agreement largely released Grammer from motion picture representation obligations; in exchange, Grammer extended television and commercial representation obligations for two years.
- The renewal contracts were executed in January 1995 but were post-dated to begin May 20, 1996, and to expire May 20, 1998.
- The agreements were filed with Screen Actors Guild (SAG); SAG initially rejected them as noncompliant with Rule 16(g) but later accepted them after the parties represented that Grammer had competent counsel and the deal was in his best interests.
- In 1996, Grammer terminated the agency and stopped paying commissions, claiming the 1995 agreements were invalid under Rule 16(g).
- The agency commenced SAG arbitration seeking unpaid commissions; Grammer counterclaimed seeking return of commissions already paid.
- The arbitrators found the agreements violated Rule 16(g) in multiple respects but concluded SAG’s acceptance constituted a waiver of those defects and awarded the agency over $2 million.
- The district court confirmed the arbitration award; Grammer and William Morris Agency appealed.

## Issues

1. Whether the arbitration award should be vacated because the arbitrators’ factual findings lacked record support.
2. Whether the arbitrators exceeded their authority by interpreting Rule 16(g) to permit waiver through SAG’s acceptance despite language requiring written waivers.

## Decision

- The Ninth Circuit affirmed the district court’s confirmation of the SAG arbitration award.
- The court held that the arbitrators acted within their authority in interpreting Rule 16(g) and its waiver concept in the collective bargaining framework.
- The court held that the award had sufficient record support, including evidence of SAG’s initial rejection and later acceptance after receiving assurances about counsel and best interests.
- The agency’s award of more than $2 million in unpaid commissions remained in effect.

## Legal Principles

- Judicial review of labor arbitration awards is highly deferential; courts do not reconsider the merits if the arbitrator is arguably construing the governing agreement and acting within delegated authority.
- An arbitration award must be confirmed if it draws its essence from the parties’ collectively bargained dispute-resolution scheme and is not a decision untethered from that scheme.
- Arbitrators do not exceed their jurisdiction by resolving interpretive conflicts within union or guild rules governing contracts when those issues are committed to arbitration.
- Courts will not reweigh evidence or disturb arbitral factfinding unless the findings are wholly unsupported or irrational under the limited vacatur standard.

## Conclusion

The Ninth Circuit upheld confirmation of a SAG arbitration award enforcing post-dated agency agreements despite Rule 16(g) defects, because the arbitrators reasonably construed SAG’s informed acceptance and filing of the agreements as a waiver and the award was supported by the record under deferential labor-arbitration review.


Grammer v. The Artists Agency, 287 F.3d 886 (9th Cir. 2002)