Labor & Employment Law

Reinstatement of employee held to be in excess of arbitrator's powers

A transit authority employee was discharged for allegedly assaulting a customer. An arbitrator determined that the employee had committed the assault, but reduced the penalty to reinstatement without back pay.

The employer commenced proceedings pursuant to CPLR article 75, seeking to vacate the arbitrator?s reduction in penalty. The trial court reinstated the original penalty of discharge. The New York Appellate Division affirmed (3-2), concluding that the arbitrator exceeded his authority in reducing the penalty.

New York City Transit Authority v. Transport Workers (New York App Div 12/30/2008) (3-2)

The collective bargaining agreement provided:

"If there is presented to the [arbitrator] for decision any charge which, if proved in Court, would constitute a felony, or any charge involving assault, theft of Authority property, intoxication, use of Controlled Substances, chronic absenteeism, the question to be determined by the [arbitrator] shall be with respect to the fact of such conduct. Where such charge is sustained by the [arbitrator], the action by the Authority, based thereon, shall be affirmed and sustained by the [arbitrator] except if there is presented to the [arbitrator] credible evidence that the action by the Authority is clearly excessive in light of the employee's record and past precedent in similar cases. It is understood by the parties that this exception will be used rarely and only to prevent a clear injustice." [emphasis added by the court]

The majority said:

Turning to the facts of this case, the TA did not specifically contend in its petition, nor does it argue in its brief on appeal, that the penalty of dismissal was appropriate based on the employee's disciplinary record, although, as noted, that record is not unblemished and includes a prior (albeit remote) incident involving an altercation with a customer. Nonetheless, the CBA requires that a two-pronged showing be made in order to invoke the exception, with only the first prong being the employee's disciplinary record. The TA's position is that the second prong, which allows the arbitrator to set aside the TA's penalty if it is clearly excessive in light of past precedent in similar cases, has not been met here. Here, the TWU cited no precedent at all. The TA, by contrast, submitted arbitral precedents, some of which purportedly involved dismissals of employees who had engaged in verbal harassment and assault, whose dismissals were upheld through arbitration. The arbitrator distinguished those precedents, but an examination of his decision reveals that he focused largely on issues, such as witness corroboration, that were relevant to the question of whether the underlying charged offenses in fact occurred (in two instances, he described the disciplined employees as "short-term"). However, having found that an assault did occur in this case, that point of distinction was irrelevant. Furthermore, nowhere in the "discussion and analysis" section of his opinion does the arbitrator use the words "clearly excessive" (except in quoting the CBA), or otherwise indicate why the dismissal of a TA conductor who assaulted a customer was a "clear injustice."

The minority would have upheld the arbitrator, and said

Here, the arbitrator determined that the "credible evidence" before him demonstrated that dismissal was "clearly excessive" in light of the employee's service record and the past precedent proffered by the TA, and thus the circumstances warranted invocation of the "rare[]" exception of reducing the penalty sought by the TA "to prevent a clear injustice."

My view: I don't know whether the arbitrator was "right" or "wrong" in his analysis. What I do know is that courts ought not second-guess an arbitrator who is selected by two sophisticated parties to a collective bargaining agreement. Courts should not substitute their own opinion of how the case should come out.

Full post as published by Arbitration Blog on January 07, 2009 (boomark / email).