Opaque "Make whole" award unenforceable, court remands to arbitrator for resolution
January 18, 2009 by Ross Runkel at LawMemo
Due to budget cuts at the City of Oakdale, Kimberly Mossman lost her job. She claimed she had bumping rights under the City's personnel rules, and the parties agreed to arbitrate the dispute.
An arbitrator decided that the City violated its own personnel rules. Then the arbitrator provided this award:
“The remedy in this case requires adaptation to present circumstances. The hearing in this case occurred almost one year after the relevant vacancies were filled. By that time, the new occupants had cultivated some degree of expertise. While this factor must not block Mossman from receiving appropriate relief, there is merit in allowing the parties time to assess present circumstances in the context of the findings set forth above, so that their mutual interests may be best served.”
What did that mean?
The City tried to get the award vacated on the ground that the arbitrator acted outside her jurisdiction by failing to decide the issue that was presented to her.
The California Court of Appeal refused to vacate the award on that ground. At the same time, the court didn't see how it could enforce the award the way it was written. Therefore, the court remanded the dispute to the arbitrator for a more specific calculation of the award. Mossman v. City of Oakdale (California Ct App 01/14/2009).
Why didn't the parties themselves go back to the arbitrator?
Perhaps because she was slow in rendering the original award. The parties had to write to her to urge that the award be issued.
Perhaps because the arbitrator reserved jurisdiction for only 30 days. But the court did not consider itself bound by the arbitrator's 30 day limit. The court noted that the parties did not place a limit on the arbitrator's post-award jurisdiction, and assumed that the 30 days was a mere "calendar-managing tool for the arbitrator."
My view: Too bad the parties ate up so much time, money, and energy litigating a case that they previously had decided to arbitrate. For some reason they decided not to go back to the arbitrator for clarification or for help in resolving their new dispute about the details of the remedy. In the end, the court made them do that anyhow.
LawMemo Arbitration Blog celebrates its fourth birthday
January 15, 2009 by Ross Runkel at LawMemo
This week the LawMemo Arbitration Blog celebrates its fourth birthday.
To each of you who reads this blog from time to time, you have my thanks.
Writing entries for the blog has been a worthwhile experience for me. It has, like all public writing, forced me to be as clear as possible about my own thinking. It has also helped me to better understand my own opinions on things.
Perhaps some of my writings have been beneficial to those who read the blog. I truly hope so. Even if not, I have been a beneficiary.
Reinstatement of employee held to be in excess of arbitrator's powers
January 07, 2009 by Ross Runkel at LawMemo
A transit authority employee was discharged for allegedly assaulting a customer. An arbitrator determined that the employee had committed the assault, but reduced the penalty to reinstatement without back pay.
The employer commenced proceedings pursuant to CPLR article 75, seeking to vacate the arbitrator’s reduction in penalty. The trial court reinstated the original penalty of discharge. The New York Appellate Division affirmed (3-2), concluding that the arbitrator exceeded his authority in reducing the penalty.
New York City Transit Authority v. Transport Workers (New York App Div 12/30/2008) (3-2)
The collective bargaining agreement provided:
"If there is presented to the [arbitrator] for decision any charge which, if proved in Court, would constitute a felony, or any charge involving assault, theft of Authority property, intoxication, use of Controlled Substances, chronic absenteeism, the question to be determined by the [arbitrator] shall be with respect to the fact of such conduct. Where such charge is sustained by the [arbitrator], the action by the Authority, based thereon, shall be affirmed and sustained by the [arbitrator] except if there is presented to the [arbitrator] credible evidence that the action by the Authority is clearly excessive in light of the employee's record and past precedent in similar cases. It is understood by the parties that this exception will be used rarely and only to prevent a clear injustice." [emphasis added by the court]
The majority said:
Turning to the facts of this case, the TA did not specifically contend in its petition, nor does it argue in its brief on appeal, that the penalty of dismissal was appropriate based on the employee's disciplinary record, although, as noted, that record is not unblemished and includes a prior (albeit remote) incident involving an altercation with a customer. Nonetheless, the CBA requires that a two-pronged showing be made in order to invoke the exception, with only the first prong being the employee's disciplinary record. The TA's position is that the second prong, which allows the arbitrator to set aside the TA's penalty if it is clearly excessive in light of past precedent in similar cases, has not been met here. Here, the TWU cited no precedent at all. The TA, by contrast, submitted arbitral precedents, some of which purportedly involved dismissals of employees who had engaged in verbal harassment and assault, whose dismissals were upheld through arbitration. The arbitrator distinguished those precedents, but an examination of his decision reveals that he focused largely on issues, such as witness corroboration, that were relevant to the question of whether the underlying charged offenses in fact occurred (in two instances, he described the disciplined employees as "short-term"). However, having found that an assault did occur in this case, that point of distinction was irrelevant. Furthermore, nowhere in the "discussion and analysis" section of his opinion does the arbitrator use the words "clearly excessive" (except in quoting the CBA), or otherwise indicate why the dismissal of a TA conductor who assaulted a customer was a "clear injustice."
The minority would have upheld the arbitrator, and said
Here, the arbitrator determined that the "credible evidence" before him demonstrated that dismissal was "clearly excessive" in light of the employee's service record and the past precedent proffered by the TA, and thus the circumstances warranted invocation of the "rare" exception of reducing the penalty sought by the TA "to prevent a clear injustice."
My view: I don't know whether the arbitrator was "right" or "wrong" in his analysis. What I do know is that courts ought not second-guess an arbitrator who is selected by two sophisticated parties to a collective bargaining agreement. Courts should not substitute their own opinion of how the case should come out.
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