Arbitrator exceeded authority ruling on the merits after finding grievance untimely
Amalgamated Transit Union, Local 85 grieved the actions of the Port Authority of Allegheny County in unilaterally revising its performance code governing absenteeism. At the arbitration the Port Authority maintained that the grievance was untimely, and even if timely was without merit. The Arbitrator agreed that the grievance as untimely but ruled further that in any event the PA had not breached the contract. The Union sought to vacate that portion of the decision addressing the merits of the grievance. It claimed that once the arbitrator determined the grievance was untimely the arbitrator was without authority to rule on the merits. The trial court rejected the Union's efforts, finding that the Union had never sought to bifurcate the procedural from the substantive issues. On appeal the Commonwealth Court of Pennsylvania reversed. It agreed with the Union, concluding: " Because the merits portion of the arbitration award cannot logically flow from the CBA due to the arbitration panel's disposition as to timeliness, the arbitration award does not satisfy the essence test."
The Court's opinion can be found here.
City erred in canceling vacations during Republican convention
The City of Cleveland, in anticipation of hosting the Republican National Convention, announced that no vacations would be approved for the time period surrounding the convention. The Cleveland Police Patrolmen's Association grieved this decision as contrary to its cba. The parties agreement provided for 52 one week "furlough" [vacation] periods during the calendar year and further provided that the same number of officers would be on furlough during each of the furlough periods. Arbitrator Alan Miles Ruben upheld the Union's grievance. He found that the management rights provision of the cba did not override the explicit language of the cba. However, in light of the disruption that would be created in recanvassing for vacation, and the undisputed need for an "all hands" response, he ordered the City to pay the most senior fifty (the number otherwise eligible for vacation) Patrol Officers scheduled on duty, in seniority rotation, time at the call in rate overtime rate. Cleveland.com reports on the decision and links to the award here.
Two briefs filed seeking reconsideration of Deflategate decision
The NFL Players Association has filed a request for reconsideration with the Second Circuit, seeking a rehearing of the Court's decision upholding the suspension of Tom Brady. A copy of the Union's brief is available here. The New England Patriots filed an amicus brief in support of the request.
Termination of police officer for racially derogatory text messages upheld
Arbitrator Carey M. Fischer has upheld the termination of a Fort Lauderdale police officer who engaged in an exchange with coworkers of text messages containing "disparaging and offensive racial terminology." Arbitrator Fischer rejected the officer's claims that the messages had been improperly intercepted, that he had a right to privacy in communicating with fellow officers, and that his communications were protected by the First Amendment. The arbitrator observed: "The heat of battle is one thing; denigrating a whole group as part of one's personal entertainment is another. A slip of the tongue in a fit of pique or a one time indiscretion maybe allowable. But, the conduct in this case is not." Accordingly he upheld the decision of the City that grievant had engaged in "conduct unbecoming a police officer" and found sufficient cause for dismissal. Local10 reports on the case and links to Arbitrator Fischer's award here.
Sunday, May 29, 2016
Sunday, May 22, 2016
CA9: Decision that an award is not "plausible" is insufficient to vacate
A dispute arose between Drywall Dynamics, Inc and the Southwestern Regional Council of Carpenters concerning attempts by the Company to withdraw from a multi employer bargaining arrangement. The Company's initial attempt to terminate its participation was rejected by the Union as untimely. A second rejection occurred after the association and the Union entered into a Memorandum of Understanding extending the cba for an additional year. In response to a grievance concerning the Company's claimed breach of the cba, an arbitration panel determined that the Company's purported withdrawal was untimely.
The Union sought to confirm the award and the Company sought to vacate it. The District Court vacated the award, concluding that the arbitrator's interpretation of the agreement was not plausible, and that it was contrary to public policy.
On the Union's appeal, the Ninth Circuit has reversed. In doing so it recognized that language of several earlier opinions suggested that an award would be deemed to have drawn its essence from the parties cba as long as it was a "plausible interpretation of the contract." It determined however, that the plausibility inquiry did not authorize an independent basis for an attack on the merits of the award. Finding that the term was "somewhat misleading" the Court decided to eliminate its use. It concluded:
...it is time for us to retire the use of "plausibility" as a term to describe the courts' role in reviewing labor arbitration awards. We do not, of course, propose any substantive change to the settled law in this area, nor could we. We merely reiterate, and emphasize, the fundamental concept Hawaii Teamsters articulated, drawing on decades of Supreme Court jurisprudence: the quality—that is, the degree of substantive validity—of an arbitrator's interpretation is, and always has been, beside the point. Instead, the appropriate question for a court to ask when determining whether to enforce a labor arbitration award interpreting a collective bargaining agreement is a simple binary one: Did the arbitrator look at and construe the contract, or did he not?
The Ninth Circuit's opinion can be found here.
The Union sought to confirm the award and the Company sought to vacate it. The District Court vacated the award, concluding that the arbitrator's interpretation of the agreement was not plausible, and that it was contrary to public policy.
On the Union's appeal, the Ninth Circuit has reversed. In doing so it recognized that language of several earlier opinions suggested that an award would be deemed to have drawn its essence from the parties cba as long as it was a "plausible interpretation of the contract." It determined however, that the plausibility inquiry did not authorize an independent basis for an attack on the merits of the award. Finding that the term was "somewhat misleading" the Court decided to eliminate its use. It concluded:
...it is time for us to retire the use of "plausibility" as a term to describe the courts' role in reviewing labor arbitration awards. We do not, of course, propose any substantive change to the settled law in this area, nor could we. We merely reiterate, and emphasize, the fundamental concept Hawaii Teamsters articulated, drawing on decades of Supreme Court jurisprudence: the quality—that is, the degree of substantive validity—of an arbitrator's interpretation is, and always has been, beside the point. Instead, the appropriate question for a court to ask when determining whether to enforce a labor arbitration award interpreting a collective bargaining agreement is a simple binary one: Did the arbitrator look at and construe the contract, or did he not?
Concluding that the panel's analysis was grounded in a reading of the parties' agreement the Court found that the award was entitled to be confirmed.
The Court also rejected the Company's public policy challenges to the award which had claimed the award violated a policy of voluntary relationships between employers and multi employer associations and that it improperly imposed union representation on the Company's employees.
The Ninth Circuit's opinion can be found here.
Sunday, May 15, 2016
Working below classification, seniority and management rights
These were the topics in issue in a recent award by Arbitrator Richard Beens.
The dispute arose between Boise White Paper and Steelworkers Local 159 and involved interpretation of the parties' cba. The agreement had what the arbitrator described as a strong management-rights clause providing:
The dispute arose between Boise White Paper and Steelworkers Local 159 and involved interpretation of the parties' cba. The agreement had what the arbitrator described as a strong management-rights clause providing:
Section 3.1 The Company has the right to assign work to employees, irrespective of any past
practices or previous agreements which purported to limit or reserve the types of work to be assigned to
employees in any way. Further, nothing contained in this Agreement including, but not limited to, the
Recognition Article shall limit in any way the Company’s right to assign work to employees covered by
this Agreement or to other employees not cover by this Agreement.
The Company and Union were parties to a separate Memorandum of Understanding which also addressed the assignment of work and was designed to enhance efficient operation of the facility. It was the relationship between these two documents that formed the basis for the Union's claim. Specifically the Union challenged Company's temporary assignment of bargaining unit employees to jobs below their attained position on the seniority ladder.
The Progression Ladder which had previously been in place at the facility engendered what the arbitrator referred to as a "not my job" refrain from unit employees. The MOA was designed to address that perception and enhance the efficiency of a struggling operation. The Union claimed, however, that the MOA did not authorize the Company to temporarily assign employees downward, and claimed that such an assignment violated employees' seniority rights.
Arbitrator Beens rejected these claims, concluding:
The Union argues that the giving the Employer the right to assign downward nullifies the seniority provisions of the CBA. I disagree. Union members continue to accrue seniority during their temporary assignments and are only assigned to positions for which they are qualified, again as required by the CBA. The Union presented no evidence that [Grievant's], or any other Local 159 member’s, seniority or qualification status was in any way affected by a temporary assignment.
***
The Company and Union were parties to a separate Memorandum of Understanding which also addressed the assignment of work and was designed to enhance efficient operation of the facility. It was the relationship between these two documents that formed the basis for the Union's claim. Specifically the Union challenged Company's temporary assignment of bargaining unit employees to jobs below their attained position on the seniority ladder.
The Progression Ladder which had previously been in place at the facility engendered what the arbitrator referred to as a "not my job" refrain from unit employees. The MOA was designed to address that perception and enhance the efficiency of a struggling operation. The Union claimed, however, that the MOA did not authorize the Company to temporarily assign employees downward, and claimed that such an assignment violated employees' seniority rights.
Arbitrator Beens rejected these claims, concluding:
The Union argues that the giving the Employer the right to assign downward nullifies the seniority provisions of the CBA. I disagree. Union members continue to accrue seniority during their temporary assignments and are only assigned to positions for which they are qualified, again as required by the CBA. The Union presented no evidence that [Grievant's], or any other Local 159 member’s, seniority or qualification status was in any way affected by a temporary assignment.
***
In summary, Article 3.1 gives the Employer broad rights to assign employees, “...irrespective of
any past practices or previous agreements which purported to limit or reserve the types of work to be
assigned to employees in any way.” The CBA, MOA, and Pay for Knowledge provisions relied on by the
Union do not modify the Employer’s rights to make temporary downward assignments under Article 3.1.
Base[d] on the clear, unambiguous contract language, I must deny this grievance.
Arbitrator Beens' award can be found here.
Arbitrator Beens' award can be found here.
Sunday, May 1, 2016
MD Court: Arbitrator exceeded his authority when he relied on a cba provision the County was not authorized to negotiate
Prince George's County, MD and the Prince George's County Police Civilian Employees Association were parties to a cba that included language providing that covered employees were entitled to a notice of their eligibility to have a Union representative present prior to an investigatory interview.
Grievant was the subject of both a criminal investigation regarding alleged crimes and an internal affairs investigation concerning workplace conduct. Grievant was interviewed by employees of the Department's Criminal Investigations Division concerning the alleged crimes, and separately by the Department's Internal Affair's Division concerning workplace issues. Grievant was provided the requisite notice concerning the Internal Affairs investigation but not for the CID interview. Grievant's employment was ultimately terminated. An arbitrator overturned the dismissal, concluding in part that the failure to provide notice of grievant's eligibility for the presence of a Union representative during the CID investigation violated the cba and undermined the County's claim of just cause
The City sought to set aside the award, arguing, inter alia, that the award was against public policy. The Court of Special Appeals granted the County's request, concluding (in an opinion discussed in Weingarten and criminal investigations of employees) that the award was contrary to an explicit , dominant, and well-defined public policy of effective law enforcement. The Union appealed, and the Maryland Court of Appeals has now affirmed, but on different grounds. The Court described the issue before it as:
whether a county has the authority under the county's code to enter into a collective bargaining agreement requiring that, before a criminal investigative interview of one of the county's police civilian employees, the employee be advised of the right to have a union representative present at the interview—i.e., that the employee be advised of aWeingarten right in the collective bargaining agreement.
Concluding that the County had no such authority, the Court went on to decide that the arbitrator had therefore exceeded his authority by relying on a provision of the cba that was beyond the County's authority to enter into. It noted:
In sum, a careful review of Maryland case law and authority from other jurisdictions leads to the conclusion that an arbitration award may be vacated where an arbitrator exceeded his or her authority and that an arbitrator exceeds the arbitrator's authority by issuing an award where one of the parties lacked authority to enter into the underlying contract. For the reasons set forth above, we conclude that PGCC § 13A-109(a) does not confer upon the County the authority to enter into a collective bargaining agreement requiring that a police civilian employee be advised of a right to have a union representative present before a criminal investigative interview by the Prince George's County Police Department.
In light of this conclusion the Court found it unnecessary to decide the public policy question addressed by the Court of Special Appeals.
The Court's opinion in Prince George's County Police Civilian Employees Association v. Prince George's County, Maryland can be found here.
Grievant was the subject of both a criminal investigation regarding alleged crimes and an internal affairs investigation concerning workplace conduct. Grievant was interviewed by employees of the Department's Criminal Investigations Division concerning the alleged crimes, and separately by the Department's Internal Affair's Division concerning workplace issues. Grievant was provided the requisite notice concerning the Internal Affairs investigation but not for the CID interview. Grievant's employment was ultimately terminated. An arbitrator overturned the dismissal, concluding in part that the failure to provide notice of grievant's eligibility for the presence of a Union representative during the CID investigation violated the cba and undermined the County's claim of just cause
The City sought to set aside the award, arguing, inter alia, that the award was against public policy. The Court of Special Appeals granted the County's request, concluding (in an opinion discussed in Weingarten and criminal investigations of employees) that the award was contrary to an explicit , dominant, and well-defined public policy of effective law enforcement. The Union appealed, and the Maryland Court of Appeals has now affirmed, but on different grounds. The Court described the issue before it as:
whether a county has the authority under the county's code to enter into a collective bargaining agreement requiring that, before a criminal investigative interview of one of the county's police civilian employees, the employee be advised of the right to have a union representative present at the interview—i.e., that the employee be advised of a
Concluding that the County had no such authority, the Court went on to decide that the arbitrator had therefore exceeded his authority by relying on a provision of the cba that was beyond the County's authority to enter into. It noted:
In sum, a careful review of Maryland case law and authority from other jurisdictions leads to the conclusion that an arbitration award may be vacated where an arbitrator exceeded his or her authority and that an arbitrator exceeds the arbitrator's authority by issuing an award where one of the parties lacked authority to enter into the underlying contract. For the reasons set forth above, we conclude that PGCC § 13A-109(a) does not confer upon the County the authority to enter into a collective bargaining agreement requiring that a police civilian employee be advised of a right to have a union representative present before a criminal investigative interview by the Prince George's County Police Department.
In light of this conclusion the Court found it unnecessary to decide the public policy question addressed by the Court of Special Appeals.
The Court's opinion in Prince George's County Police Civilian Employees Association v. Prince George's County, Maryland can be found here.
Sunday, April 24, 2016
Another unsuccessful public policy challenge to an arbitrator's award
The City of Cleveland terminated the employment of a police officer for her essentially undisputed actions of stabbing a romantic partner.
Grievant had been dating and, for a time, living with the partner. He had a criminal history of convictions for a number of offenses including drug possession, sexual battery, attempted kidnapping and gross sexual imposition. On March 12, 2012 the two engaged in an argument and grievant, while intoxicated, stabbed the partner several times and fled the scene. She was found in her vehicle with a cord that was suspended from the ceiling of the car wrapped around her neck. Grievant was arrested and charged with felonious assault. She was subsequently charged with a reduced offense and sentenced to county jail for six months. The sentence was suspended but her employment was terminated.
In an award (discussed here) Arbitrator Paul Gerhart ordered her reinstatement. He concluded that while grievant had engaged in "particularly egregious" conduct the temination was not for just cause. Arbitrator Gerhart relied on evidence that other officers who had engaged in arguably similar behavior had not been terminated and found that this evidence of disparate treatment undermined the City's case. He noted also a number of mitigating factors and reinstated her (without back pay) subject to her refraining from alcohol and her compliance with any requirements imposed by the City's Employee Assistance Program.
The City sought to set aside the award but the trial court refused to do so. The Court of Appeals of Ohio has now affirmed that decision and upheld the award. City of Cleveland v. Cleveland Police Patrolmen's Association. The City claimed that the award was contrary to public policy, a claim that the Court quickly rejected. The Court observed that the City had failed to state a well defined public policy argument and noted:
The arbitrator acted within his discretion, and the City did not effectively argue how his decision is in conflict with public policy. The City only argues that the public should be able to have the confidence in police officers and that officers should hold themselves to the highest ethical standard. However, there are many cases where police officers have not held themselves to such a high standard, and yet they were not terminated from their jobs.
The Court also rejected the City's claims that the arbitrator improperly required it to use progressive discipline and did not issue a "final" award because he essentially deferred to the City's Employee Assistance Program to decide what, if any, continuing counseling was appropriate.
Grievant had been dating and, for a time, living with the partner. He had a criminal history of convictions for a number of offenses including drug possession, sexual battery, attempted kidnapping and gross sexual imposition. On March 12, 2012 the two engaged in an argument and grievant, while intoxicated, stabbed the partner several times and fled the scene. She was found in her vehicle with a cord that was suspended from the ceiling of the car wrapped around her neck. Grievant was arrested and charged with felonious assault. She was subsequently charged with a reduced offense and sentenced to county jail for six months. The sentence was suspended but her employment was terminated.
In an award (discussed here) Arbitrator Paul Gerhart ordered her reinstatement. He concluded that while grievant had engaged in "particularly egregious" conduct the temination was not for just cause. Arbitrator Gerhart relied on evidence that other officers who had engaged in arguably similar behavior had not been terminated and found that this evidence of disparate treatment undermined the City's case. He noted also a number of mitigating factors and reinstated her (without back pay) subject to her refraining from alcohol and her compliance with any requirements imposed by the City's Employee Assistance Program.
The City sought to set aside the award but the trial court refused to do so. The Court of Appeals of Ohio has now affirmed that decision and upheld the award. City of Cleveland v. Cleveland Police Patrolmen's Association. The City claimed that the award was contrary to public policy, a claim that the Court quickly rejected. The Court observed that the City had failed to state a well defined public policy argument and noted:
The arbitrator acted within his discretion, and the City did not effectively argue how his decision is in conflict with public policy. The City only argues that the public should be able to have the confidence in police officers and that officers should hold themselves to the highest ethical standard. However, there are many cases where police officers have not held themselves to such a high standard, and yet they were not terminated from their jobs.
The Court also rejected the City's claims that the arbitrator improperly required it to use progressive discipline and did not issue a "final" award because he essentially deferred to the City's Employee Assistance Program to decide what, if any, continuing counseling was appropriate.
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
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
Sunday, March 27, 2016
"No-add" language in cba doesn't prevent arbitrator from modifying contract
Can an arbitrator rewrite a contract to reflect the original intent of the parties despite language prohibiting the arbitrator from adding to or modifying the agreement? Arbitrator Michael Rapport said yes, and the District Court in Arizona has now confirmed that award.
The cba between Asarco and the Steelworkers called for the payment of a Copper Price Bonus to unit employees on a quarterly basis, computed relative to the current price of copper. The agreement limited eligibility to employees accruing credit under the pension plan at the end of the calendar quarter.
In negotiation for a successor contract in 2011, the Company proposed that new employees would not be covered by the pension plan. It was undisputed, however, that there was no discussion of the impact of that proposal on the eligibility of new employees for the Copper Price Bonus or the link between pension eligibility and eligibility for the bonus plan. The new agreement, with the Company's language on elimination of pension eligibility for new employees, was ultimately agreed to by the Union and ratified by the members.
After agreement was reached, one of the Company's HR representatives asked the Company's Director of Labor Relations about the impact of the pension language on bonus eligibility, explaining that as he read the language new employees were no longer eligible. The Director responded that "we have an issue here" and that this was new information for him. It was also undisputed that for several months after the new agreement became effective new employees were told that they would be eligible for the bonus.
As the time for payment arrived, the Company notified the Union that it would not be paying the bonus to new employees. It maintained that the express language of the agreement rendered ineligible new employees not participating in the pension plan. The Union grieved the Company's decision and the dispute was submitted to Arbitrator Rappaport for resolution.
The Arbitrator issued an award upholding the grievance. He noted that while no contract language supported the Union's position, the doctrine of mutual mistake applied and warranted reformation of the contract. He found that neither party anticipated the impact of the elimination of pension eligibility on eligibility for the bonus payment. He rejected the Company's argument that language in the cba that withheld from the arbitrator "jurisdiction or authority to add to, detract from or alter in any way the provisions of [the] Agreement" prevented him from reaching such a conclusion. He observed:
What all this means is that the ultimate issue in this case is whether the Union met its heavy burden of showing that there was a mutual mistake made by the parties in negotiating and adopting the July 1, 2011 MOA. In situations of that kind, it has been recognized by numerous, but not all, arbitrators and other authorities that in the interests of justice and fairness, the arbitrator can rewrite a contract to correct what appears to be an obvious mutual mistake.
Accordingly the Arbitrator modified the cba to explicitly include eligibility of new employees for the Copper Price Bonus.
Asarco sought to set aside Arbitrator Rapport's award, arguing that he had exceeded his authority and that he had ignored the "no-add" provision of the cba. The Court summarized Asarco's claim:
ASARCO argues that the Arbitrator exceeded the express jurisdiction and authority granted to him by the parties and dispensed his own brand of industrial justice by issuing an award that fails to draw its essence from the BLA [Basic Labor Agreement] because it expressly violates the BLA. ... CitingUnited Food & Comm'l Workers Union, Local 1119, AFL-CIO v. United Markets, Inc. , 784 F.2d 1413 , 1415 (9th Cir. 1986), ASARCO contends that if "the arbitrator's interpretation [of the collective bargaining agreement] violates the terms of the agreement, the court cannot enforce the award." (Doc. 1 at 11.) According to ASARCO, the award must be vacated because the Arbitrator added a new five-line term to the BLA, despite the BLA's express language stating that the Arbitrator did not have authority to vary the terms of the agreement.
Rejecting this claim, the District Court concluded :
The Court finds that the "no-add" provision did not close the door on the Arbitrator's authority to fashion relief when the undisputed facts revealed mutual mistake by the parties. The Arbitrator's reformation of the collective bargaining agreement only corrected the defect in the written document so that it reflected the true terms of the parties' agreement. The Arbitrator did not exceed his authority by applying ordinary principles of mutual mistake and reformation in the context of the "no-add" provision of the BLA.
The Court accordingly denied Asarco's request to vacate the award and granted the Union's request that the award be confirmed. The Court's decision can be found here.
A similar resolution is discussed at Correcting mutual mistake is not the same as modifying the contract
The cba between Asarco and the Steelworkers called for the payment of a Copper Price Bonus to unit employees on a quarterly basis, computed relative to the current price of copper. The agreement limited eligibility to employees accruing credit under the pension plan at the end of the calendar quarter.
In negotiation for a successor contract in 2011, the Company proposed that new employees would not be covered by the pension plan. It was undisputed, however, that there was no discussion of the impact of that proposal on the eligibility of new employees for the Copper Price Bonus or the link between pension eligibility and eligibility for the bonus plan. The new agreement, with the Company's language on elimination of pension eligibility for new employees, was ultimately agreed to by the Union and ratified by the members.
After agreement was reached, one of the Company's HR representatives asked the Company's Director of Labor Relations about the impact of the pension language on bonus eligibility, explaining that as he read the language new employees were no longer eligible. The Director responded that "we have an issue here" and that this was new information for him. It was also undisputed that for several months after the new agreement became effective new employees were told that they would be eligible for the bonus.
As the time for payment arrived, the Company notified the Union that it would not be paying the bonus to new employees. It maintained that the express language of the agreement rendered ineligible new employees not participating in the pension plan. The Union grieved the Company's decision and the dispute was submitted to Arbitrator Rappaport for resolution.
The Arbitrator issued an award upholding the grievance. He noted that while no contract language supported the Union's position, the doctrine of mutual mistake applied and warranted reformation of the contract. He found that neither party anticipated the impact of the elimination of pension eligibility on eligibility for the bonus payment. He rejected the Company's argument that language in the cba that withheld from the arbitrator "jurisdiction or authority to add to, detract from or alter in any way the provisions of [the] Agreement" prevented him from reaching such a conclusion. He observed:
What all this means is that the ultimate issue in this case is whether the Union met its heavy burden of showing that there was a mutual mistake made by the parties in negotiating and adopting the July 1, 2011 MOA. In situations of that kind, it has been recognized by numerous, but not all, arbitrators and other authorities that in the interests of justice and fairness, the arbitrator can rewrite a contract to correct what appears to be an obvious mutual mistake.
Accordingly the Arbitrator modified the cba to explicitly include eligibility of new employees for the Copper Price Bonus.
Asarco sought to set aside Arbitrator Rapport's award, arguing that he had exceeded his authority and that he had ignored the "no-add" provision of the cba. The Court summarized Asarco's claim:
ASARCO argues that the Arbitrator exceeded the express jurisdiction and authority granted to him by the parties and dispensed his own brand of industrial justice by issuing an award that fails to draw its essence from the BLA [Basic Labor Agreement] because it expressly violates the BLA. ... Citing
Rejecting this claim, the District Court concluded :
The Court finds that the "no-add" provision did not close the door on the Arbitrator's authority to fashion relief when the undisputed facts revealed mutual mistake by the parties. The Arbitrator's reformation of the collective bargaining agreement only corrected the defect in the written document so that it reflected the true terms of the parties' agreement. The Arbitrator did not exceed his authority by applying ordinary principles of mutual mistake and reformation in the context of the "no-add" provision of the BLA.
The Court accordingly denied Asarco's request to vacate the award and granted the Union's request that the award be confirmed. The Court's decision can be found here.
A similar resolution is discussed at Correcting mutual mistake is not the same as modifying the contract
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