Monday, May 14, 2012

Two awards affirmed, one vacated

Three recent cases reach different results in actions to set aside arbitration awards.

In Wausaukee School District v. Wausaukee Education Association a Court of Appeals in Wisconsin reverses a lower court decision setting aside an arbitration award. The issue before the arbitrator was whether the School District violated the cba by partially laying off one teacher. The arbitrator upheld the union’s grievance, finding that the layoff was not driven by financial considerations or specific curriculum related reasons but was instead undertaken for improper reasons and in bad faith. He awarded the grievant back pay equivalent to the job reduction. The School District sought to vacate the award, and the lower court granted that request. It concluded that the arbitrator did not find a violation of the layoff article, that the question of whether it was necessary to lay off teachers was beyond the arbitrator’s authority, and that the decision to layoff was not a mandatory subject of bargaining. The Court of Appeals reversed, finding that the arbitrator, in effect, found a violation of the layoff article because he concluded the District “purported to lay off [Grievant] even though there was no credible reason to believe that the District acted on budgetary needs, curriculum needs, or any other reason…” necessary to decrease the number of teachers. While the cba gave the District significant discretion to make layoffs, the Court concluded that the arbitrator properly concluded that the District could not use a layoff as a pretext for terminating a teacher when the evidence failed to show that its actions were in fact based on budgetary reasons.

In Trenton Educational Secretaries Association v. Trenton Board of Education a NJ appellate court similarly reversed a lower court decision setting aside an arbitrator’s award. The underlying grievance involved a claim that certain employees were eligible for compensation for performing the duties of a higher level position. The arbitrator upheld the grievance and the Board of Education went to court seeking to vacate the award. The court granted the BOE’s request, concluding that the award was based on clearly mistaken view of the facts and, in any event, was contrary to public policy. Overturning the lower court, the appellate court concluded: “There is no mistake of fact, much less one so gross as to justify overturning the arbitration award.” The court also rejected the lower courts public policy reasoning, finding it was based on “amorphous considerations”, not a policy embodied in legislative enactments, administrative regulations, or legal precedents. It concluded that the award“does not contravene public policy; it merely honors the contractual promise the Board made to its secretaries in …the Agreement”.

In contrast, in Horton Automatics v. Industrial Division of the Communications Workers of Americathe US District Court for the Southern District of Texas set aside an award reinstating an employee found to have violated the employer’s safety rule. The cba provided that “In determining whether the Company had cause to impose the aggrieved disciplinary action, the Arbitrator shall be limited to deciding whether a published rule or regulation which formed the basis for the discipline was in fact reasonable and violated by the employee” The arbitrator found the safety rule in issue was a reasonable one, and that the employee had violated it. Nevertheless, he concluded that the dismissal was without just cause because the employee had not terminated employees for violation of what the arbitrator considered similarly serious (but different) safety violations. Vacating the award, the District Court determined:

The Arbitrator further second-guessed the relative importance of different “serious” disciplinary violations. As a result, the Arbitrator substituted his judgment for that of Horton, the company responsible for the safe operation of the business for which [Grievant] had been employed. This, he was not empowered to do….


As a matter of law, the Arbitrator exceeded his powers … when he inquired into matters other than the reasonableness of the safety rule and the fact that [Grievant] had violated it.

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