Waiver of a challenge to the jurisdiction of an arbitrator and how to avoid it

The Ninth Circuit has affirmed a decision rejecting an effort by Asarco to vacate an award by Arbitrator Michael Rappaport. (The District Court's decision, and Arbitrator Rappaport's  award are discussed in "No-add" language in cba doesn't prevent arbitrator from modifying contract.) The Court  disagreed, however, with the District Court's decision that Asarco had not waived its challenge to the jurisdiction of the arbitrator to hear the dispute.

Arbitrator Rappaport upheld a grievance claiming that the parties had not discussed or understood the impact of an agreement to exclude new hires from the existing pension plan on the eligibility of the new hires to participate in a separate bonus plan. Concluding that the parties were mutually mistaken about how the pension modification would impact bonus eligibility, he ordered the contract amended to specifically provide for bonus eligibility for the new hires notwithstanding their exclusion for the pension plan. Asarco filed suit to vacate the award, arguing that the arbitrator had exceeded his authority by ignoring contract language providing:

The arbitrator shall not have jurisdiction or authority to add to, detract from or alter in any way the provisions of this Agreement.

The District Court rejected the Union's claim that Asarco had waived its challenge to the arbitrator's jurisdiction but, on the merits, "concluded that the arbitrator did not violate the no-add provision because the reformation corrected a defect in the [cba], which was the product of mutual mistake, to reflect the terms the parties had agreed upon"

On appeal, the Circuit Court found that Asarco had, in fact, waived its challenge to the arbitrator's jurisdiction. 

The Court reviewed several methods a challenge to an arbitrator's jurisdiction could be asserted:

Generally speaking, the issue of arbitrability is decided by the courts. ...  The parties may, however, agree to submit the question of arbitrability to the arbitrator. ... Additionally, as occurred here, the parties may stipulate that the controversy is arbitrable. If, however, a party "objects to arbitration on jurisdictional grounds, [it] may refuse to arbitrate the case."... The party seeking arbitration is "then put to the task of petitioning the court to compel arbitration." ... Alternatively, a party can "object[ ] to the arbitrator's authority, refuse[ ] to argue the [jurisdictional] issue before him, and proceed[ ] to the merits of the grievance." Id. at 1475. "[T]hen, clearly the [jurisdictional] question would have been preserved for independent judicial scrutiny." Id. "The same result could be achieved by making an objection as to jurisdiction and an express reservation of the question on the record." Id.

As another alternative, the objecting party can "take[ ] the initiative by seeking declaratory and injunctive relief prior to the commencement of the arbitration." .... The objecting party can take any of these steps to "obtain[ ] an independent judicial examination of the [jurisdictional] question."

The Court concluded that Asarco had not utilized any of these methods. It noted that at the beginning of the arbitration hearing Asarco had stipulated that the matters properly before the arbitrator and that the arbitrator had jurisdiction to decide the grievance. Finding a waiver, the Court observed:

When ASARCO argued to the arbitrator that the he lacked authority to reform the [cba], it submitted that issue to the arbitrator, and could not seek a different result from the district court. The argument was waived. Additionally, ASARCO's decision to argue the issue to the arbitrator suggests that it never really objected to the arbitrator's jurisdiction at all, but rather objected only to the arbitrator crafting the remedy that the Union sought.

Judge Ikuta, dissenting, would have vacated the award as an improper effort by the arbitrator to ignore the clear language of the contract and to dispense his own brand of industrial justice.

The Court's opinion can be found here.

Update: The Court has withdrawn the opinion discussed and substituted a new one. (here). The new opinion does not contain the discussion of waiver of  a challenge to the arbitrator's jurisdiction.

Arbitrator: City didn't prove rape, but "extremely poor judgement" found. Termination converted to a 40 hour suspension

In his award in Portland Police Association and City of Portland, Arbitrator David Stiteler reversed the termination of a Portland police officer, converting the discipline to a forty hour suspension. Grievant had been dismissed for having sexual intercourse with an acquaintance (A) when she was too intoxicated to consent (essentially an allegation of rape) and by acting unprofessionally and in a way that could bring discredit on the Bureau by having sexual contact with A after she had been drinking.

Grievant, his wife and A had been friends for some time. Grievant and A had occasionally flirted, and later A, at grievant's request, sent him sexually explicit pictures of herself. There was conflicting testimony about subsequent interactions between the two.

The incident culminating in grievant's termination occurred during a party at grievant's  home in October of 2015. A testified that during the party she felt sick, went upstair to vomit and and went to lie down in a guest bedroom. There was a dispute about what took place next, but both agree there was some sexual contact on more than one occassion. A testified that grievant put his penis in her mouth. She asserted grievant left but returned a second time and repeated his conduct. He then, according to her, returned a third time and briefly had sexual intercourse with her. A testified that she tried to tell him to stop but was unable to say anything. According to grievant the sexual activity that took place was at A's invitation.

The next day A had a rape kit done, and several days later filed a complaint with the County Sheriff's office. The Sheriff's office conducted an investigation, and submitted its conclusion to the prosecutor's office which declined to prosecute, finding insufficient evidence to prove beyond a reasonable doubt that grievant had committed sexual assault. The Bureau conducted its own investigation and submitted its report to grievant's superior. He recommended that the first charge not be sustained, finding insufficient evidence to make a determination between the two versions of what had taken place. However, he recommended the addition of a second charge, that grievant had "acted unprofessionally and in a manner tending to bring reproach or discredit" to the Police Bureau "by having sexual intercourse with (A) after she had consumed alcohol." He felt the second charge was warranted, and a 40 hour suspension appropriate,  because "grievant should have been aware of consent issues."  The recommendations were reviewed (and concurred in) by more senior officers and by the Police Review Board, and were ultimately submitted to the Chief. The Chief initially agreed with the recommendations on both charges. Later, however, he concluded that the allegations of the first charge should also be sustained. Grievant's employment was thereafter terminated.

The dispute was grieved and submitted to Arbitrator Stiteler for resolution. Arbitrator Stiteler initially rejected the Union's claim that because the alleged misconduct occurred while grievance was off duty, it was "largely beyond the City's reach." He noted:

It is well established that an employer has an elevated burden when imposing discipline for conduct outside work. In such cases, the employer must show some clear connection between the alleged misconduct and its legitimate business interests.
I agree with the City, however, that the mere fact that Grievant may have been off-duty does not, in and of itself, mean his conduct is beyond the City's reach. Policy directive 310.00 expressly addresses off-duty conduct, and is aimed at conduct that could damage the public image of the Bureau and the City. The conduct at issue, involving questions about whether sexual activity was consensual, is of the type that falls within the policy directive's proscriptions, and its impacts are connected to Grievant's employment.

He also noted that a police officer's conduct, both on and off duty, is subject to greater scrutiny:

It is also well established that there is a certain relativism in judging alleged employee misconduct. Employees in certain jobs or industries may be held to a higher standard.
Law enforcement is one such profession. A police officer occupies a unique position of trust. That carries with it a special responsibility to avoid conduct that may damage the public's perception. Thus, Grievant's behavior, though off-duty, was a legitimate concern for the Bureau and the City.

However, he found the first charge unproven. While reinforcing that he did not necessarily find A's testimony "not credible," he concluded that in the absence of persuasive evidence there was no reasonable basis for the Chief to reject the recommendations of virtually everyone who had previously reviewed the case. Accordingly he found the Chief's decision to terminate grievant's employment was without just cause.

Nevertheless, he also concluded that the City had sustained the allegations of the second charge:

Grievant knew or should have known that he needed to avoid questionable behavior or misconduct. He knew or should have known that A had been drinking, regardless of whether she appeared intoxicated. He knew or should have known that A had been less enthusiastic about their involvement since the August lunch. All of those things should have led him to make sure she was okay with any sexual contact the night of the party. Instead, he ignored those things and engaged in conduct that could have brought discredit on the City and the Bureau.

Finding grievant had "exhibited extremely poor judgment in his behavior with A on the night of the party" Arbitrator Stiteler upheld the initial 40 hour suspension that had been recommended.