Sunday, May 3, 2015

Connecticut Supreme Court clarifies use of public policy in challenges to arbitration awards

Since first recognizing a public policy exception to the general rule of deference to arbitrator's awards, the Connecticut Supreme Court has issued six decisions in which an employer has sought to vacate, on public policy grounds, an arbitrator's award reinstating an employee. The Court summarized those decisions as follows:

 In one half of those cases, we held that reinstatement of the terminated employee violated a clear public policy of the state. See State v. AFSCME, Council 4, Local 391, supra, 309 Conn. 521 (correction officer engaged in persistent sexual harassment of coworkers); Groton v. United Steelworkers of America, 254 Conn. 35, 36–37, 757 A.2d 501 (2000) (weighmaster at municipal landfill pleaded nolo contendere to embezzlement charge); State v. AFSCME, Council 4, Local 387, AFL-CIO, 252 Conn. 467, 468–69, 747 A.2d 480 (2000) (correction officer placed obscene, racist telephone call to state senator). In the other three cases, we upheld the decision of the arbitrator reinstating the terminated employee. See Stratford v. AFSCME, Council 15, Local 407, supra, 315 Conn. 50–52 (police officer misrepresented history of alcohol use during official medical exam); State v. New England Health Care Employees Union, District 1199, AFL-CIO, supra, 271 Conn. 129–31 (Department of Mental Retardation employee shoved agitated client into chair); South Windsor v. South Windsor Police Union Local 1480, Council 15, 255 Conn. 800, 802–805, 770 A.2d 14 (2001) (police officer deemed unfit for duty after drawing gun on trespassers playing basketball in school gym). 

In its unanimous decision in Burr Road Operating Company II, LLC v. New England Health Care Employees Union, District 1199 the Court has, in an effort "to assure consistent, principled decisions," clarified the factors a reviewing court should consider when evaluating such a claim. The case arose from the arbitration of a grievance filed by an employee of a nursing facility. The grievant had delayed in reporting her suspicion that a resident had been abused. The arbitrator concluded that while the delay warranted some discipline, termination was too severe. The employer sought to vacate the award, but the Superior Court denied the request. The nursing home appealed, and the Appellate Court (in an opinion discussed here) vacated the arbitrator's award. The Appellate Court determined that the award violated the public policy calling for protection of nursing home residents. The Supreme Court has now used this case to clarify the factors to be used by courts in reviewing awards in the face of a public policy challenge, and to assist arbitrators in the types of factual findings they may make to assist a reviewing court in considering such a challenge. The Court synthesized a four pronged test for review:

Specifically, in determining whether termination of employment was necessary to vindicate the public policies at issue, both the majority and the dissenting opinions of this court have, either expressly or implicitly, focused on four principal factors: (1) any guidance offered by the relevant statutes, regulations, and other embodiments of the public policy at issue; (2) whether the employment at issue implicates public safety or the public trust; (3) the relative egregiousness of the grievant’s conduct; and (4) whether the grievant is incorrigible

Applying these factors to the case before it, the Court first found no serious challenge to the applicable public policy of protecting vulnerable nursing home residents. Concerning the second issue, the Court observed that it is a "rare case" in which the Court will vacate on public policy grounds an award reinstating an employee in the private sector. It recognized however, a limited exception when reinstatement of a grievant by itself would pose a serious threat to public safety (e.g. reinstatement of a pilot for operating an aircraft while drunk). The Court noted that residential nursing home facilities pose "something of an exceptional case" because of the state's interest in protecting vulnerable residents. It found this factor neutral with respect to vacating the award in this case. Turning to the third and fourth factors, the Court found an insufficient basis for overturning the award. It noted that, as found by the arbitrator, grievant had in fact ultimately reported her suspicions, and there was no evidence of a likelihood of recidivism. Finding that the Appellate Court had improperly substituted its judgment for that of the arbitrator, the Court reversed and remanded the case for consideration of a second issue not previously addressed by the Appellate Court.

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