Recent cases - Untimeliness of an award, public policy challenges, and neutrality of party appointed arbitrators

Untimeliness of arbitrator's award doesn't warrant vacating award

In First Student, Inc v International Brotherhood of Teamsters, Local 959, the District Court for Alaska denied a request to vacate an award of Arbitrator Elizabeth Ford. The parties had submitted to Arbitrator Ford a dispute concerning the Company's alleged failure to seek an alternate assignment for a bus driver taken off his route at the client's request. The cba called for the arbitrator's award to be issued within 30 days of the closing of the hearing or submission of  briefs. The signed award of Arbitrator Ford was not submitted until almost four weeks beyond that date. 

Rejecting the Company's argument that this delay rendered the award void, the Court relied on the Ninth Circuit's decision in McKesson Corp. v. Local 150 IBT. In McKesson the Ninth Circuit noted :

In the absence of an express agreement to the contrary, procedural questions are submitted to the arbitrator, either explicitly or implicitly, along with the merits of the dispute. ... The question of the authority of the arbitrator to issue an award after the sixty day period involves just such a procedural matter. McKesson's contention that the time limit is jurisdictional in nature and may not be submitted to the arbitrator is in error. Courts have uniformly held that limitations on the time in which an arbitrator may render an award are procedural not jurisdictional.

The District Court concluded that the Arbitrator's decision to issue an award after the thirty day period was a procedural matter that had been submitted to the arbitrator along with the merits of the dispute and that the thirty day limitation was "precatory" and did not limit the arbitrator's authority.

Courts reject public policy challenges to awards

Two recent decisions reject employer public policy challenges to arbitrators awards.

In City of Duluth v. Duluth Police Union, Local 807 the Minnesota Court of Appeals denied an appeal by the City of Duluth from the lower court's order rejecting the City's challenge to an award of Arbitrator Mario Bognanno. Arbitrator Bognanno had found that grievant had improperly used excessive force, but found termination too severe. He ordered grievant's reinstatement without backpay. The arbitrator's award and the lower court's decision are addressed in City will appeal reinstatement of police officer dismissed for improper use of force. Observing that the public policy challenge must be to the arbitrator's award, not the grievant's conduct, the Court concluded "in sum, even though [grievant's] use of force was contrary to a public policy against unreasonable use of force, the arbitrator's award of reinstatement without back pay is not."

In Steward Carney Hospital, Inc. v. Massachusetts Nurses Association the District Court in Massachusetts rejected the Hospital's public policy challenge to an award of Arbitrator Michael Stutz reinstating a nurse in the Hospital's adolescent psychiatric unit. Grievant had been dismissed for allegedly failing to review a "safety tool" (a questionnaire used to identify important patient information including what makes them feel upset or unsafe, preferred methods on intervention and how best to communicate when the patient is upset) and for allegedly failing to intervene when another nurse was observed mistreating the patient. 

Arbitrator Stutz found that grievant was properly subject to discipline, but not termination. He converted the termination to a disciplinary warning.

The Hospital sought to vacate the award, asserting that the reinstatement was contrary to applicable regulations requiring that hospital staff  "meet 'clinical competencies and operational standards,' that all personnel be 'qualified' and demonstrate 'competencies' and that provide that the Hospital could lose its license it cannot provide proper treatment to patients."

Rejecting the Hospital's challenge, the Court concluded:

... nothing in the regulations establishes a policy that a nurse who committed the grievant’s conduct be prohibited from working at a hospital. See Bos. Med. Ctr. 260 F.3d at 23  (holding that the question is whether the order to reinstate the grievant violates public policy).  The only positive law that could be discerned from the Hospital’s argument is a policy against hospitals employing unqualified personnel. Notably, while the Hospital could have reported the grievant’s conduct to the Massachusetts agency governing the registration of nurses, the Arbitrator found that the Hospital did not file a report about the grievant’s conduct with any such state agency. Award [#1-7] at 9. The Hospital offers no connection between the Arbitrator’s Award and “some explicit public policy that is well defined and dominant and is to be ascertained by reference to the laws and legal precedents and not from general considerations of supposed public interests.” Misco, 484 U.S. at 43 (internal quotations and citations omitted).

Party arbitrators and neutrality

Matter of Patrolmen's Benevolent Association of the City of New York, Inc. v. New York State Public Employment Relations Board involved a challenge to the City of New York's anointment of a party arbitrator to a three person panel in an interest arbitration. The Union challenge the City's appointee, claiming that his service as a consultant to the City and prior representation of it demonstrated a lack of impartiality. Rejecting the challenge, the Appellate Division found no requirement that a party appointed arbitrator be "neutral." The Court observed:

We turn next to petitioner's claim that Linn should be disqualified based upon improper partiality and hostility toward petitioner. "[S]trange as it may seem to those steeped in the proscriptions of legal and judicial ethics," New York has no requirement that a party-appointed arbitrator must be impartial (Matter of Siegel [Lewis], 40 N.Y.2d 687, 690 [1976]). It is well recognized that tripartite arbitration has a "partisan character" (Matter of Astoria Med. Group [Health Ins. Plan of Greater N.Y., 11 N.Y.2d 128, 135 [1962]). "The right to appoint one's own arbitrator, which is of the essence of tripartite arbitration ..., would be of little moment were it to comprehend solely the choice of a `neutral.' It becomes a valued right, which parties will bargain for and litigate over, only if it involves a choice of one believed to be sympathetic to [the selecting party's] position or favorably disposed to him [or her]" (id.; see 13 Weinstein-Korn-Miller, NY Civ Prac CPLR ¶ 7511.16). Notably, in tripartite arbitration, both parties are equally free to select the arbitrators they prefer. Further, party-appointed arbitrators typically have a depth of knowledge on the subject in question that "can be of assistance to the neutral member, who is not in a position to appreciate the problem and the fine points of its setting.... [T]o disqualify an arbitrator because of [partiality] ... would be to withhold from the [panel] a source of the specialized knowledge which contributes to the unique value of the arbitration process" (Matter of Astoria Med. Group [Health Ins. Plan of Greater N.Y.], 11 NY2d at 138 [internal quotation marks and citations omitted]). Consistent with these principles, CPLR article 75 provides for the vacatur of an arbitration award based upon the partiality of an arbitrator only when the challenged arbitrator was "appointed as a neutral" (CPLR 7511[b][1][ii]; see Matter of Meehan v Nassau Community Coll., 243 A.D.2d 12, 17-18 [1998], lv denied 92 N.Y.2d 814 [1998]). [footnote omitted]

The court held that the "evident partiality" of a party appointed arbitrator was not a basis for disqualification.