Monday, January 23, 2012

Arbitrator's reliance on past practice not beyond scope of authority

          A Texas Court of Appeals has rejected an attempt to overturn an arbitration award concerning buy back of unused sick leave.City of Laredo v. Mojica.

          The dispute arose when the City stopped buying back unused sick leave, claiming that the contractual buy back process was discretionary and the cost of buying back unused sick leave from all City employees would have been financially burdensome. The union asserted that the City’s decision to suspend the program violated the CBA.

          The arbitrator concluded that the contract did give the City discretion concerning the buy back issue, but “the City’s unvarying practice of exercising its annual option to purchase accumulated sick leave for more than 10 years reasonably has led the Union and its members to expect the City to continue to exercise the annual option absent a good faith reason to suspend the program.”

          In seeking to set aside the award, the City maintained that the arbitrator exceeded his authority under the contract by considering whether the firefighters’ expectation that the City would buy back their sick leave was subject to a “good faith” standard.

          In refusing to set aside the award, the court held:

Because Mojica alleged a violation of the CBA due to the City's past practices, this would affect the interpretation or application of the CBA's provisions. Therefore, we hold the issue of the City's past practices of buying back the firefighters' sick leave was an arbitrable issue
Here, the CBA did not expressly state that the City's past practice of buying back sick leave or whether the City acted in good faith could be considered. But, even if the arbitrator made a mistake of fact or misapplied the substantive law when he considered the City's past practices, we find his consideration of the City's past practice drew its essence from the CBA                    

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