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Arbitration Law Memo December 2006
by Ross Runkel at LawMemo
Arbitration Law Memo December 2006
by LawMemo - World's Best
Also available by free monthly email.
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Arbitration - Individual Contracts ***
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OH - No-solicit injunction allowed without referral to arbitration.
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CA - Statute required Labor Commissioner to determine contract validity prior to arbitration (2-1).
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Arbitration - Collective Bargaining Agreements ***
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3rd - Award satisfied when back wages paid despite simultaneous discharge for other conduct.
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6th - Court decides question of timeliness of demand for arbitration.
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NY - Arbitrator improperly applied beyond reasonable doubt standard for employee discharge.
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WA - Arbitration clause didn't survive expiration of collective bargaining agreement.
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MA - Arbitrator exceeded his authority by relying on statute.
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1st - Union should grieve new dispute instead of suing to enforce prior award.
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4th - MPPAA’s mandatory arbitration provision applies to Section 1405 withdrawal liability disputes.
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PA - Award reducing post-retirement medical benefits affirmed.
*** Arbitration - Individual Contracts ***
OH - No-solicit injunction allowed without referral to arbitration.
Summit Retirement Plan Services v.
Bergdorf (Ohio Ct App 11/22/2006)
http://www.sconet.state.oh.us/rod/newpdf/9/2006/2006-ohio-6154.pdf
The employer sued Bergdorf for violation of a non-solicitation agreement seeking a preliminary injunction. The trial court granted the preliminary injunction. The Ohio Court of Appeals affirmed. The agreement provided that in addition to arbitration the employer could seek an injunction from a court of competent jurisdiction. The court found that the express statement in the agreement supported the court order for injunctive relief and did not require referral to arbitration.
TX - Arbitration agreement not illusory although employer had right to make changes in employee policies.
DR Horton v. Brooks (Texas Ct App
11/02/2006)
http://www.14thcoa.courts.state.tx.us/opinions/htmlopinion.asp?OpinionId=82777
Brooks sued the employer for age discrimination in violation of the Texas Commission on Human Rights Act. The trial court denied the employer's motion to compel arbitration. The Texas Court of Appeals reversed. The court found that the arbitration agreement was binding and not illusory where the employee handbook allowed the employer to make unilateral changes in employee policies.
TX - Arbitration agreement not illusory although employer had right to make prospective changes to arbitration agreement.
In re Champion Technologies (Texas
Ct App 11/02/2006)
http://www.11thcoa.courts.state.tx.us/opinions/htmlopinion.asp?OpinionId=8417
Employees sued the employer for wrongful discharge. The trial court denied the employer's motion to compel arbitration. The Texas Court of Appeals reversed. The court found that the employer could not amend the arbitration agreement without prior notice to the employee. The court concluded that the arbitration agreement was not illusory.
CA - Statute required Labor Commissioner to determine contract validity prior to arbitration (2-1).
Ferrer v. Preston (California Ct App
11/30/2006)
http://caselaw.lp.findlaw.com/data2/californiastatecases/b188997.pdf
Ferrer sued the employee for a declaration that the validity of the employment contract was not subject to arbitration under the Talent Agencies Act (TAA) and for injunctive relief to restrain the employee from proceeding with arbitration. The trial court stayed arbitration pending final resolution by the Labor Commissioner. The California Court of Appeal affirmed. The question before the court was who has original jurisdiction to make the determination as to the validity of the parties' contract. Because the Labor Commissioner found Ferrer raised a colorable claim under the TAA, the court determined that the administrative procedures before the Labor Commissioner must be resolved before resort to another tribunal. The DISSENT argued that when fully informed parties with equal bargaining power agree to arbitrate any dispute arising out of their business dealings, their agreement should be enforced.
*** Arbitration - Collective Bargaining Agreements ***
3rd - Award satisfied when back wages paid despite simultaneous discharge for other conduct.
Local 1776 v. Excel (3rd Cir
12/01/2006)
http://caselaw.lp.findlaw.com/data2/circs/3rd/052091p.pdf
The union sued the employer under section 301 of the Labor Management Relations Act (LMRA) to enforce an arbitration award. The trial court found in favor of the employer. The 3rd Circuit affirmed. The issue on appeal was whether the employer satisfied the arbitrator's award when it paid the employee back wages and simultaneously discharged the employee a second time for conduct independent of the first discharge. The court affirmed considering the circumstances of this case, (1) the employer notified the employee that his attack on the security guard was grounds for discharge, (2) the arbitrator only considered the alleged theft by the employee, not the attack on the security guard, (3) the employer effectively reinstated the employee as required by the arbitral award by paying him for the period between the time he was suspended pending investigation of the attempted theft through the effective date of his discharge, (4) the employer had an independent reason (the attack on the security guard) to discharge the employee, and (5) the union had already filed a second grievance pursuant to which a second arbitrator will have the opportunity to rule on the issues of notice, waiver, and the existence of good cause for the second discharge.
6th - Court decides question of timeliness of demand for arbitration.
United Steelworkers v. Saint Gobain
Ceramics (6th Cir 10/30/2006)
http://www.ca6.uscourts.gov/opinions.pdf/06a0402p-06.pdf
The union sued to compel arbitration of a grievance under the parties' collective bargaining agreement. The trial court granted summary judgment for the employer, based on its conclusion that, under General Drivers, Warehousemen and Helpers, Local Union 89 v. Moog Louisville Warehouse, 852 F.2d 871 (6th Cir 1988), the grievance wasn't arbitrable because the union failed to timely file its demand for grievance arbitration. The 6th Circuit affirmed, observing that "[l]ike two prior panels of this court, we have serious misgivings about the soundness of Moog's reasoning .... [b]ut like those panels, we are constrained to follow Moog and therefore affirm." The court further observed that "[a]s best as we can tell, Moog stands alone in saying that the clarity of a time-bar provision (providing, for example, that an appeal to arbitration is barred if not filed within a certain number of days), without regard to the clarity of its application ... by itself makes a dispute one of substantive arbitrability [for the court to decide, as opposed to a procedural question for an arbitrator to decide]."
NY - Arbitrator improperly applied beyond reasonable doubt standard for employee discharge.
NY
State Law Enforcement Officers Union v. State (New York App Div 11/30/2006)
http://www.courts.state.ny.us/reporter/3dseries/2006/2006_08861.htm
The New York Supreme Court dismissed the employee's petition to confirm an arbitration award which reversed the employee's discharge. The New York Supreme Court, Appellate Division affirmed. The court ruled the arbitrator award requiring proof beyond a reasonable doubt exceeded a specific limitation on the arbitrator's powers where the collective bargaining agreement provided that the employer's burden of proof in a disciplinary matter, even where the conduct might constitute a crime, was not proof beyond a reasonable doubt.
WA - Arbitration clause didn't survive expiration of collective bargaining agreement.
Maple Valley Firefighters v. King
County Fire Dist (Washington App Div 10/30/2006)
http://www.courts.wa.gov/opinions/pdf/56807-8.pub.doc.pdf
The union sued the public employer, seeking to compel arbitration of a grievance relating to discontinuation of a health care plan. The trial court dismissed, on the grounds that the grievance arbitration provision was no longer in effect because the collective bargaining agreement had expired. The court affirmed, stating "[a] grievance arbitration clause does not survive the expiration of a collective bargaining agreement with regard to grievances arising after the expiration date of the agreement."
MA - Health insurance premiums dispute was not arbitrable.
Water Resources Authority v. AFSCME
(Massachusetts Ct App 11/13/2006)
http://www.socialaw.com/slip.htm?cid=16624&sid=119
The union demanded grievance arbitration (CBA), seeking to enforce a collective bargaining agreement provision requiring the public employer to pay 85% of its employees' health insurance premiums. The trial court granted injunctive and declaratory relief in the employer's favor, staying arbitration. The court affirmed, concluding that the trial court didn't err when it found that "the percentages of the contribution ... are subject to the nondelegable power of the Legislature, pursuant to Mass. Gen. Laws c. 32A, and are not governed by the terms of the collective bargaining agreement."
MA - Arbitrator exceeded his authority by relying on statute.
Sheriff v. AFSCME Council 93
(Massachusetts Ct App 11/07/2006)
http://www.socialaw.com/slip.htm?cid=16611&sid=119
The corrections officers' union prevailed in a grievance arbitration relating to the employer's calculation of an officer's seniority date. The trial court vacated the arbitration award. The court affirmed, agreeing with the employer's argument that "the arbitrator based his award not on an interpretation of the terms and conditions of the parties' collective bargaining agreement, as he was required to do, but rather on language contained in a statute."
1st - Union should grieve new dispute instead of suing to enforce prior award.
Massachusetts Nurses Assn v. North
Adams (1st Cir 10/26/2006)
http://www.ca1.uscourts.gov/cgi-bin/getopn.pl?OPINION=05-2799.01A
The union prevailed in a grievance arbitration regarding adequate nurse staffing. Three years later, another dispute regarding nurse staffing arose. Instead of filing a new grievance, the union filed suit to enforce the arbitration award. The trial court granted judgment on the pleadings (Fed.R.Civ.P. 12(c)) in favor of the employer. The 1st Circuit affirmed. In appropriate circumstances, a present labor dispute may be resolved via a trial court's enforcement of a prior arbitration award. As noted by the court, however, "[t]he trick, of course, is discerning what circumstances are sufficient to warrant bypassing the normal grievance procedures." The instructions for performing that "trick" are set forth in Derwin v. Gen. Dynamics Corp., 719 F.2d 484 (1st Cir 1983). Applying Derwin, the court concluded that dismissal was appropriate.
4th - MPPAA’s mandatory arbitration provision applies to Section 1405 withdrawal liability disputes.
Bd of Trustees v. BES Services (4th
Cir 11/29/2006)
http://caselaw.lp.findlaw.com/data2/circs/4th/051634p.pdf
29 USC Section 1401(a)(1) of the Multiemployer Pension Plan Amendments Act (MPPAA) states that “[a]ny dispute between an employer and the plan sponsor of a multiemployer plan concerning a determination made under sections 1381 through 1399 of this title shall be resolved through arbitration.” Section 1405 of the MPPAA provides limitations on withdrawal liability under the act for certain employers. The 4th Circuit confronted the question “whether a claim to the reductions in withdrawal liability authorized by 29 USC Section 1405 must be arbitrated by reason of the mandatory arbitration provision in Section 1401(a).” The court held that the answer to that question is “yes.” The court reasoned, “consideration of the limitations of Section 1405 is required in making a ‘determination’ of withdrawal liability under Sections 1381 and 1391, which are explicitly subject to Section 1401’s arbitration requirement, and therefore issues arising under Section 1405 are subject to Section 1401’s arbitration requirement as well.”
PA - Award reducing post-retirement medical benefits affirmed.
City of Pittsburgh v. Fraternal
Order of Police (Pennsylvania Cmwlth 11/22/2006)
http://www.courts.state.pa.us/OpPosting/CWealth/out/56CD04_11-22-06.pdf
The Pennsylvania Commonwealth Court held that an arbitration award reducing post-retirement medical benefits for police officers was not improper. The Pennsylvania Supreme Court remanded this case to the Pennsylvania Commonwealth Court to determine "Whether the Commonwealth Court's decision permitting the reduction of post-retirement healthcare benefits for active officers conflicts with the Supreme Court decision in Appeal of Upper Providence Township, 526 A2d 315 (Pa 1987)." The court stated that one of the issues dealt with in Upper Providence 2 was 53 PaCS section 2962(3) which provided that home rule municipalities were not "authorized to diminish the rights or privileges of any former municipal employee entitled to benefits or any present municipal employee in his pension." The court defined the question implicit in the remand was whether section 2962(3), as interpreted by Upper Providence 2, precluded an arbitration panel from reducing post-retirement medical benefits in the future for officers who had not yet retired. The court interpreted Upper Providence 2 as applying only to former or retired employees because the issue addressed at all stages of the proceedings was whether post-retirement medical benefits could be provided to retired employees and their families.
The court next considered 53 PaCS section 2962(c)(3) which prohibited diminishing through collective bargaining or arbitration "the rights or privileges of ... any present municipal employee in his pension or retirement system." The court opined that post-retirement medical benefits conferred through collective bargaining were not "rights or privileges" under section 2962(c)(3).
The court concluded that its decision did not conflict with Upper Providence 2 nor was it contrary to 53 PaCS section 2962(c)(3).
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Editor: Ross Runkel, Professor of Law Emeritus. email Ross@LawMemo.Com, Phone 503-399-8028. Copyright LawMemo, Inc.
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