Sunday, February 26, 2017

Arbitrators exceeding their powers - three courts reverse

Arbitrator ignored limitations in cba

The cba between CenterPoint Energy and the Gas Workers sets forth several offenses which provide "absolute causes" for discharge and limit an arbitrator to the question of whether the employee, in fact, committed the offense. 

An employee was dismissed for allegedly "falsifying time sheets and neglect of duty," both of which are among the "absolute cause" offenses. The dispute about the dismissal was submitted to arbitrator Richard Miller for resolution. In his award, Arbitrator Miller found that the Company had established that grievant had engaged in the conduct alleged on some, but not all, of the dates in question. Nevertheless, he concluded that the Company did not have just cause for the dismissal. Rejecting the Company's reliance on the "absolute cause" language, the Arbitrator concluded that he was still free to modify the discipline.  He held:

To interpret Article 26 in any other manner would violate all of the basic notions fairness and due process firmly established in the history of industrial relations and implicit in Article 26, which also includes a just cause standard for discipline and discharge.

Arbitrator  Miller converted the discipline to a suspension without back pay and ordered the grievant's reinstatement.

CenterPoint sought to vacate the award, claiming that the arbitrator exceeded his authority by ignoring the explicit language of the contract. The District Court agreed. It found:

The Arbitrator here acted outside the scope of his authority by disregarding the plain language of the CBA.

This provision clearly and unambiguously limits the arbitrator's authority to determining whether an employee is guilty of the facts constituting any of the four absolute causes. Once the arbitrator makes that determination, the arbitrator's authority ceases and he can no longer fashion a remedy he believes is appropriate given the circumstances. 

Accordingly the Court vacated the award.

Arbitrator altered the charges against  a teacher and then found charge unsupported

  The NJ Supreme Court in Bound Brook Bd of Education v. Ciripompa overturned an award of Arbitrator Michael J. Pecklers in a teacher tenure proceeding. 

 Two counts of tenure charges had been brought against the teacher for unbecoming conduct. The first related to claims that the teacher had used his employer issued laptop to send nude pictures of himself and to solicit similar pictures from women on the internet. Count II alleged that he had engaged in inappropriate conduct towards female staff members and made comments about their dress and physical appearence. The tenure charges were submitted to Arbitrator Pecklers for resolution. Arbitrator Pecklers found that the Board proved the allegations of Count I. With regard to Count II,  he noted that while the Count did not specifically allege sexual harassment, in light of the evidence this was the substance of the allegation. He then considered the evidence in light of the NJ Supreme Court's decision in Lehmann v. Toys 'R' Us, Inc, a case interpreting the NJ Law Against Discrimination, and found that the evidence did not support a finding of a hostile work environment.  In view of his findings regarding Count I and his dismissal of Count II the arbitrator converted the dismissal to a 120 days suspension. 

On the School District's appeal, the case was ultimately appealed to the N.J. Supreme Court.  Describing the issue before it, the Court wrote:

 In this case we determine whether an arbitrator exceeded his authority by applying the standard for proving a hostile-work-environment, sexual-harassment claim in a law against discrimination (LAD) case to a claim of unbecoming conduct in a tenured teacher disciplinary hearing. We find that he did.

The Court determined that the Arbitrator erred in essentially modifying the allegations in Count II from unbecoming conduct to sexual harassment, noting 

Here, the arbitrator erroneously faulted the Board for failing to prove a charge that it did not bring. The arbitrator erred in his reliance on Lehmann because he imposed a different and inappropriate standard of proof on the Board to sustain its unbecoming conduct in the presence of students claim. The arbitrator "imperfectly executed" his power by misinterpreting the intentions of the Board so significantly as to impose a sexual harassment analysis, when such an analysis was wholly ill-suited in this context

The Court ordered the dispute remanded to a different arbitrator to decide the question of whether the teacher committed unbecoming conduct and the appropriate penalty if he did so. 

Arbitrator improperly ordered University to award tenure

The District Court of Appeal in Florida found that an arbitrator erred in ordering Florida Atlantic University to award tenure to a professor. The arbitrator found that the University relied on improper criteria in its decision to deny tenure and ordered the school to follow the established criteria and  grant the professor's application for promotion and tenure. A lower court  found that the arbitrator exceeded his authority in awarding tenure, but ordered the school to provide grievant with an additional year of employment during which she could reapply for tenure. The Court of Appeal in Nash v. Florida Atlantic University found both the arbitrator and the lower court erred.  It held:

...the arbitrator exceeded his authority in directing the University to grant Nash a promotion and tenure. Although the parties stipulated that the arbitrator would determine "the appropriate remedy" for a breach of the CBA, the parties did not expressly place before the arbitrator the issue of whether Nash should have been granted promotion and tenure. Rather, the issue was whether the University had violated the CBA's procedure for determining an application for tenure and promotion. It is clear to us that once the arbitrator found the University violated the procedure by not relying on established criteria, "the appropriate remedy" was for the arbitrator to direct the University to review Nash's application using the correct criteria.

The court also rejected the lower court's order of an additional year of employment, concluding that the lower court should have directed the University to review grievant's application using the correct criteria. 

Sunday, February 19, 2017

Quick Hits - Public policy, double jeopardy and emails

Four (unsuccessful) public policy challenges to arbitration awards

Courts continue to carefully scrutinize challenges to arbitration awards based on claims that the award is contrary to public policy. In  Cuyahoga Metropolitan Housing Authority v. Fraternal Order of Police, Ohio Labor Council, the Ohio Court of Appeals rejected the agency's request to vacate an award that converted a termination of a CMHA detective into a thirty day suspension. The Court, with one dissent, found that it was bound by the arbitrator's factual findings that the detective had not used excessive force, nor had he been dishonest as the agency had alleged. Given these factual findings the Court found no basis to overturn the award.  In City of Guthrie v. Fraternal Order of Police, Lodge 105 the Oklahoma Court of Civil Appeals similarly rejected the City's challenge to the award  of Arbitrator Mark Reed which reduced the discipline of a police lieutenant accused of improperly arresting the former husband of his girlfriend. The court found no public policy impediment to enforcement of the decision imposing a suspension rather than a termination. In Jersey City POBA v. City of Jersey City  the NJ Superior Court found no "contractual, administrative, legislative, or legal authority" compelling it to vacate an award ordering the City to pay terminal leave benefits to an officer who retired during the pendency of criminal proceeding against him. Finally, in Cornwall-Lebanon School District, v. Cornwall-Lebanon Education Association, the Pennsylvania Commonwealth Court reversed a lower court's decision vacating an award as contrary to public policy. An arbitrator had converted the discipline of a teacher, who had a sexual relationship with a student starting on her graduation night and who was alleged to have lied about it, from termination to a one year suspension. The lower court concluded that termination would prevent future inappropriate conduct and that a teacher who had lied was not an appropriate mentor for students. The Commonwealth Court found that the lower court had improperly reweighed the evidence, and noted that the arbitrator had imposed an appropriate remedy for the misconduct he found. Accordingly, and "[k]eeping in mind that the public policy exception is narrow" the Court reversed.

Arbitrator finds exchange of racist and pornographic emails justified termination

Arbitrator James Reynolds denied the grievance filed on behalf of  Miami Beach Police Lieutenant who had been terminated for distributing racially and sexually charged emails with other members of the police department. Rejecting the Union challenge to the timeliness of the investigation, and claims of disparate treatment and double jeopardy (arising from prior undocumented counseling and a demotion from a non bargaining unit position) Arbitrator Reynolds found grievant's actions "shameful and disgraceful" and sustained the termination.

Court erred in hearing testimony on petition to vacate arbitration award

The City of Norwalk, CT terminated the employment of a police sergeant who had allegedly informed another officer of a criminal investigation against him. The termination was grieved and ultimately heard by a panel of the Connecticut Board of Mediation and Arbitration. The panel (2-1) upheld the termination. In doing so it rejected the sergeant's claim that he had been subjected to double jeopardy because he had been reassigned to a different position after discovery of his actions. The panel rejected this claim, finding that no grievance had been filed about the transfer and that a transfer was not disciplinary. The Union sought to vacate the award, claiming that it was in manifest disregard of the law since it ignored the "long standing " principle that double jeopardy was part of the just cause analysis.  The trial court ordered a hearing and allowed the Union to present testimony on the circumstances surrounding the grievant's transfer. After hearing testimony the trial court concluded that because the City had no right to discipline grievant twice for the same event there was no just cause for the termination. Accordingly, it vacated the award.

The City appealed and the Connecticut Supreme Court unanimously reversed. It held:

We conclude ... that the trial court improperly allowed Couture [the grievant] to give testimony on the issue and substituted its finding that Rilling's reassignment of Couture to the patrol division constituted discipline for the arbitration board's finding to the contrary. Because the trial court's conclusion that Couture was subject to double jeopardy was predicated on this finding, and because this conclusion, in turn, provided the basis for the court's determination that the arbitration award was in manifest disregard of the law, that determination cannot stand. Accordingly, we conclude that the trial court improperly vacated the award of the arbitration board.

Sunday, February 5, 2017

Court rejects Union's challenge to outsourcing award-work was supplemental and was not replaced elsewhere

Steelworkers Local 10-86 represents employees at Merck facility in West Point, PA. The facility is primary used for the production of large molecule products like vaccines, rather than small molecule products like tablets.

Merck sold a small molecule product (Janumet) used to control blood sugar levels in individuals with Type  2 diabetes. In 2006 Merck entered into a contract with Patheon, a third party supplier, pursuant to which Patheon would produce no less than eighty percent of the total worldwide requirements for Janumet. In 2006 the West Point facility was designated as a back up facility which could supply the difference between the demand and what Patheon could manufacture. Production of Janumet at West Point continued until December of 2014 when Merck announced that it was ceasing the manufacture of Janumet at West Point because a back up supplier was no longer needed in light of "stabilization of supply and demand."

The Steelworkers grieved that decision, alleging that the Company's actions violated language of its cba which provided:

                                                     Article 15-Subcontracting
It is the intention of the parties and of this provision to protect and preserve bargaining unit work for bargaining unit employees.

The Company will not contract out work to individuals or to other companies which is normally performed by bargaining unit(s) employees where the necessary equipment is at hand, qualified employees are available, project completion dates can be met and the results would otherwise be consistent with efficient and economic operations. 

  The Union claimed that the Merck had outsourced or contracted the Janumet work at West Point in violation of the clear and express language of the contract. Merck maintained that it had not outsourced work, but that it had simply hired and laid off employees as demand for Janumet rose and then fell. It argued that it had ceased production at West Point without hiring employees elsewhere.

The dispute was submitted to Arbitrator Shyman Das, who issued an award on September 1, 2015.  Arbitrator Das essentially agreed with Merck. He concluded:

In these particular circumstances, a critical consideration as to whether the Company violated Article 15 is that the production of Janumet at West Point always was in a backup or contingent capacity. [footnote omitted[ External suppliers, in particular Patheon, always have been the primary source of Janumet production. There never was a specified volume of share of total production assigned to West Point. For much of the seven years period in which certain strengths of Janumet for distribution in the United States and European Union were manufactured at West Point, the Company needed all the Janumet West Point could produce with its existing and later expanded ...facilities and manpower. When the need no longer was there, the Company -- consistent with its large molecule versus small molecule business strategy -- decided to cease production of Janumet at West Point because its other primary suppliers with their expanded capacity were more that capable of meeting the no longer increasing demand for Janumet. On these facts, I am unable to conclude that the Company violated Article 15 by "contract[ing] out work ... which is normally performed by bargaining unit (s) employees " at West Point.

The Union sought to have the award set aside, claiming it was one of the "rare instances" where an award was subject to reversal because:

    ...  the arbitrator made his decision based on principles that were not bargained for and are not encompassed within the CBA. Specifically, the Union argues the arbitrator impermissibly "used third-party contracts and un-bargained for concepts about exclusivity and primacy to interpret the already plain and unambiguous language of Article 15."

The District Court rejected this effort and confirmed the award. Contrary to the Union's claims, the Court concluded that the arbitrator was at least "arguably construing" the cba and that there was no basis to find that he was adding to or ignoring it. The Court  noted that Arbitrator Das specifically addressed the question  of whether the work in question was "normally performed" by the West Point employees and that he also found that the work done at West Point was not replaced elsewhere. The Court noted:

Given the need to define "normally" under Article 15, the course of dealings between the parties (particularly West Point's explicit role as a supplemental supplier and Merck's large molecule-small molecule business strategy), and the fact that no jobs lost at West Point were recreated elsewhere, I am persuaded that, whether right or wrong, the arbitrator's decision was rooted in the language of the CBA. For these reasons, the Union has failed to meet its difficult burden. The arbitrator's award must be affirmed, and summary judgment is therefore granted to Merck.

The Court's decision in  United Steelworkers, Local 10-00086 v. Merck & Co. can be found here.