Sunday, November 2, 2014

Unsuccessful effort to set aside arbitrator's award not a basis for an award of attorneys' fees

SEIU Local 24/7 prevailed in an arbitration claiming that Pacific Gas and Electric had improperly denied security officers compensation for meal periods when they were subject to being on call or were required to respond to emergencies. PG&E sought, unsuccessfully, to set aside the arbitrator's award on the basis that the Arbitrator had ignored relevant contract language. The Union then sought an award of its attorneys' fees in the amount of $146,582.

The District Court, in a decision here, rejected the Union's request for an award of attorneys' fees. The court found no evidence that the Company's position was frivolous or undertaken in bad faith.

The Union appealed, and the Ninth Circuit has now affirmed. The Circuit Court noted:

Attorneys' fees are appropriate as a sanction when a party engages in bad faith or engages in conduct tantamount to bad faith. ... A refusal to obey an arbitral order may constitute bad faith conduct. ... However, a challenge to an arbitral order on the grounds that an arbitrator did not apply or misinterpreted the underlying contract does not necessarily constitute bad faith.

The Court's opinion is available here.

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