Sunday, April 3, 2016

Public policy challenges to arbitration awards - three recent cases

Award ordering compliance with wage increase in the absence of appropriation contrary to public policy

The Illinois Supreme Court has overturned lower court decisions and vacated an award of Arbitrator Edwin Benn. Arbitrator Benn upheld a grievance, finding that the State of Illinois had breached its cba with AFSCME Council 31 by refusing to implement a 2% wage increase called for in a multi-year cba. The State claimed that it could not implement the raise because the legislature had not appropriated funds. 

In his award Arbitrator Benn found that the Union was contractually entitled to the increase. He rejected the State's reliance on language of Section 21 of the IPLRA, concluding that interpretation of a statute not incorporated in the cba was beyond his authority as an arbitrator.

The State challenged the award but both the trial court and the appellate court refused to vacate it. (State must adhere to cba despite lack of appropriated funds.)

On the State's appeal the Supreme Court reversed and vacated the award. State v. American Federation of State, County and Municipal Employees, Council 31. The Court concluded: 

... we hold that section 21 of the Act, when considered in light of the appropriations clause, evinces a well-defined and dominant public policy under which multiyear collective bargaining agreements are subject to the appropriation power of the State, a power which may only be exercised by the General Assembly. We further hold that the arbitrator's award, which ordered immediate payment of the 2% wage increase without regard to the existence of corresponding appropriations by the General Assembly, violated this public policy. Accordingly, we reverse the judgments of the appellate court and circuit court, and vacate the arbitration award.

Award overturning termination of employee accused of mistreating special needs student not contrary to public policy

Grievant was employed as a special education aide, assigned to work with a student with Down's syndrome. In March of 2011 grievant was responsible for getting the late arriving student to his classroom. As she was walking the student to the classroom he dropped to the floor and refused to enter. Grievant pulled the child approximately 20 feet in to the classroom.  Other employees present, made no effort to intervene. After receiving a report of the incident the principal met with grievant who apologized and expressed remorse. Grievant was allowed to return to care for the child. Subsequently grievant was placed on unpaid leave and the employer ultimately recommended her termination. 

Arbitrator Margaret Brogan found termination excessive. The arbitrator concluded that grievant had not acted in anger,  was a long term employee without discipline, and that  grievant had been forthcoming and remorseful. Arbitrator Brogan converted the termination to a five day suspension.

The School District sought to have the award vacated, arguing, inter alia, that it was contrary to the public policy calling for protection of students from violence on school property. The court refused the Board's request, and now the Commonwealth Court of Pennsylvania has affirmed. Rose Tree Secretaries & Ed. Support Personnel Ass'n v. Rose Tree Media School District. The Court observed:

Employer's public policy argument lacks merit. Arbitrator found Grievant's version of the incident more credible than that offered by Employer. Although Arbitrator found Grievant's actions, in pulling Student, to be unacceptable, Arbitrator did not find those actions motivated by anger or intent to harm. In addition, Arbitrator did not find that Grievant's conduct harmed or abused Student, or violated school laws. ...  As such, Arbitrator essentially determined Grievant did not violate any well-defined or dominant public policy involving school violence.
In the present case, Arbitrator determined a 5-day suspension was sufficient to ensure that Grievant, a 10-year employee with a prior unblemished record, would not repeat her misconduct. Arbitrator observed that Principal instructed Grievant as to alternative strategies if a similar incident should occur. Also, Arbitrator specifically found that the corrective discipline imposed would most likely change Grievant's behavior, and that she would be able to effectively care for children going forward.

 Public policy does not compel termination of employee for single act of  sexual harassment

Grievant was a twenty-two year employee of the City of Springfield, Mass. He had signifiant physical and mental health problems, including cerebral palsy, epilepsy, and depression. He was also evaluated as having a "mildly impaired" IQ. He was accused of having  engaged in a single act of inappropriate behavior involving another employee and his employment was terminated. An arbitrator found that the grievant had engaged in the conduct alleged, but concluded that termination was too severe a penalty and that he had been subjected to disparate treatment. The arbitrator ordered his reinstatement without loss of pay.

The City sought to set aside the award, arguing that the award effectively precluded it from taking the remedial action required by state and federal law and that the award violated public policy. The Superior Court confirmed the award, and the Mass. Appeals Court has now affirmed. City of Springfield vs. United Public Service Employees Union. The Court concluded:

[Grievant's] conduct here, as found by the arbitrator, did not require dismissal because a lesser sanction, progressive discipline, would not violate public policy. In light of her findings regarding his significant mental and physical limitations, his pliant demeanor, and his twenty-two year problem-free work history,  [Grievant's] misconduct, despite its severity, did not require termination. It was within the arbitrator's ample authority to conclude that these factors made progressive discipline rather than termination an appropriate remedy. 

A somewhat similar dispute, reaching a contrary result on different facts, is discussed at Connecticut Supreme Court: Egregious sexual harassment compels termination, arbitrator's contrary award set aside

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