Arbitrator nixes mandatory flu shots for nurses
December 23, 2007 by Ross Runkel at LawMemo
Virginia Mason Hospital implemented a mandatory flu immunization program requiring proof of flu vaccination as a "fitness for duty requirement" for all nurses. And for obvious reasons. Staff-to-patient transmission is prevalent in hospitals, and the hospital's previous voluntary immunization program resulted in only 55% of the staff being immunized.
The nurses' union filed a grievance under the collective bargaining agreement (CBA), and the matter went to arbitration.
The arbitrator ruled against the hospital. He interpreted the CBA's preamble and union recognition clause as requiring the hospital to bargain collectively with the union over all terms and conditions of employment. He also found the immunization requirement did not come under the management rights clause. Because the hospital imposed the new requirement unilaterally and without first bargaining with the union, the arbitrator ordered the hospital to rescind the requirement.
The hospital sued to get the arbitrator's award overturned, but the trial court refused, and the 9th Circuit also refused. Virginia Mason Hospital v. Washington State Nurses Association (9th Cir 12/21/2007).
The 9th Circuit's opinion is textbook analysis of the role of courts in reviewing the decisions of arbitrators.
The hospital argued that the arbitrator ignored three provisions in the CBA that permitted the hospital to unilaterally implement the program. The court pointed out that the arbitrator in fact considered these three items, but found the hospital's arguments unpersuasive. As the court put it, there was no "failure to apply" the relevant CBA provisions, and a court cannot overturn an arbitrator's award merely because the court is "convinced that the arbitrator misread the contract or erred in interpreting it." [Please note that the court did not express any view as to whether the arbitrator properly interpreted the CBA, as that was "neither necessary nor appropriate."]
The hospital argued that the arbitrator improperly read into the contract a duty to bargain that was not explicitly stated in the contract. The court's reaction was that "the arbitrator is not adding new terms to the agreement but is simply finding the inferred terms already in the agreement, albeit only implied."
The hospital argued that the award was contrary to public policy. After reciting a number of statutes and administrative rules regarding infection control in hospitals, the court concluded that requiring the hospital to bargain with the union before implementing its program was not "directly incompatible" with the regulations or the public policies underlying them.
My view: This court understands the limited role courts play once an arbitrator issues a decision. I usually put it this way: The parties agreed to have an arbitrator resolve their dispute, so they can't complain to a court that the arbitrator was wrong. This does not mean that the arbitrator was right or wrong; it just means a court won't fix it.
Hall Street v Mattel: An FAA case? Or not?
December 01, 2007 by Ross Runkel at LawMemo
It is better that I eat crow now, while it is young and tender. So let the feast begin.
Up until now I have viewed Hall Street Associates v. Mattel [Details; all briefs] as an ordinary FAA case, raising the issue of whether courts must (or may) enforce a private arbitration agreement that purports to give a district court broader review powers than the FAA specifies.
Recently-filed supplemental briefs have made it clear to me that this case is in a unique posture, and that it might not be an FAA case at all.
The parties agreed - in the middle of litigation - to submit some of their issues to an arbitrator, and to reserve to the district court the authority to review the arbitrator's award for legal errors. The district court signed-off on this agreement by entering it as an order in the litigation. Later, the district court did review the arbitration award for legal error.
The 9th Circuit's holding, which is now being reviewed by the US Supreme Court, was that the Federal Arbitration Act (FAA) barred this kind of court review of an arbitrator's award. The idea, which I think is correct in a normal FAA case, was that private parties cannot expand the Congressionally-determined role of the courts in reviewing arbitration awards.
Hall Street Associates v. Mattel is quite different from the ordinary FAA case because the arbitration agreement was entered as a court order during ongoing litigation. The Supreme Court, after hearing oral arguments on November 7, asked the parties for more briefs on three questions. Here are the questions, and an outline of the parties' responses filed November 27:
- Does authority exist outside the Federal Arbitration Act (FAA) under which a party to litigation begun without reliance on the FAA may enforce a provision for judicial review of an arbitration award?
- Hall Street: Yes. (1) The district court has authority from its local rules and the Federal Rules to order the parties to arbitrate the way they did, and then review the award as ordered. (2) The common law of Oregon allows enforcement of arbitration awards.
- Mattel: No. (1) Oregon courts would not allow this form of judicial review. (2) No case-management or other authority would allow grounds for judicial review that differ from state law or the FAA.
- If such authority does exist, did the parties, in agreeing to arbitrate, rely in whole or part on that authority?
- Hall Street: Yes. The parties relied on state law and the district court's case-management authority.
- Mattel: No. The parties relied exclusively on the FAA.
- Has petitioner in the course of this litigation waived any reliance on authority outside the FAA for enforcing the judicial review provision of the parties’ arbitration agreement?
- Hall Street: No. Hall Street sought judicial review under the court's order effectuating the arbitration agreement, and did not bring a claim under the FAA.
- Mattel: Yes. Non-FAA arguments were first presented on appeal to the 9th Circuit. Hall Street's petition for certiorari relied exclusively on the FAA, and enforcement "under the FAA" was the thrust of Hall Street's brief on the merits and oral argument.
Now what? One thing is clear to me: If the procedure followed by the district court was allowed by either its local rules or state law, then the FAA does not purport to disallow that. Therefore, the Supreme Court should (1) declare that the FAA does not block the procedure followed here if it is otherwise allowed by local rules or state law, and (2) remand to the lower courts to decide whether the procedure is allowed. (The Supreme Court should not tackle local issues that have not been previously ruled on by the lower courts.)
If I'm right this time, this case will not resolve the basic question of whether, in a normal FAA case, the courts must (or may) enforce an agreement that provides for expanded judicial review.
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