Arbitration Law Memo - April 2010 
LawMemo
First in Employment Law

*** Arbitration - Individual contracts ***

·         10th - Right to compel arbitration was not waived by four month delay during litigation, nor by failing to raise the issue in the answer.

*** Arbitration - Collective bargaining agreements ***

·         WA - Mandamus not appropriate remedy for union seeking to compel governor to revise budget to include funding for pay raises awarded pursuant to interest arbitration. (5-4)

·         IL - Arbitration award reinstating transit authority bus driver violated public policy, where bus driver had been convicted of aggravated criminal sexual abuse.

·         MA - Civilian employee discharged by state police lacked grievance rights under state statute.

·         NY - No layoff clause of CBA required public employer to arbitrate abolishment of positions due to economic distress.

·         PA - School District's denomination as "special teachers" did not prevent application of CBA to void individual agreements of understanding.

·         PA - Act 111 grievance arbitration award didn't require employer to violate Pennsylvania's Confidence in Law Enforcement Act.

·         IL - Interest arbitration award reinstating public employee didn't violate public policy.

*** Arbitration - Individual contracts ***

10th - Right to compel arbitration was not waived by four month delay during litigation, nor by failing to raise the issue in the answer.

Hill v. Ricoh Americas Corp (10th Cir 04/19/2010)
http://case.lawmemo.com/10/hill.pdf

Hill sued his former employer, claiming he was discharged in violation of the Sarbanes Oxley Act. The trial court denied the employer's motion to compel arbitration on the ground of waiver; the 10th Circuit reversed.

The employer demanded arbitration four months after filing an answer, but that delay alone does not establish waiver of the right to arbitrate. The critical question was what was happening in the litigation during that period. The only discovery that had been initiated was Hill's request for production plus Rule 26(a)(1) disclosures. Trial would not take place for another 11 months; discovery could continue for another five and one-half months; the deadline for completing ADR was more than two months away. Hill "failed to show any substantial prejudice" from the delay, and failed to show that he was burdened by discovery or Rule 26 disclosures any more than if the case had gone to arbitration earlier.

The court rejected Hill's argument that the right to arbitrate was an affirmative defense that had to be contained in the employer's answer. Fed R Civ P 8(c)(1) states that "arbitration and award" is an affirmative defense, but this applies only to cases in which a claim has already been resolved by arbitration.

*** Arbitration - Collective bargaining agreements ***

WA - Mandamus not appropriate remedy for union seeking to compel governor to revise budget to include funding for pay raises awarded pursuant to interest arbitration. (5-4)

SEIU v. Gregoire (Washington 04/08/2010)
http://case.lawmemo.com/wa/seiu.pdf

The healthcare workers' union petitioned for a writ of mandamus compelling the governor to revise the budget she submitted to the legislature.  The union sought to have the budget revised so as to include funds for pay increases for 25,000 in-home personal care providers, increases that were awarded by an arbitrator after interest arbitration.  The court rejected the petition, concluding that 1) the budget revision was a discretionary (rather than ministerial) duty not appropriate as the subject for mandamus relief; and 2) even if mandamus were appropriate, the petition was moot because the legislature had already adopted a budget and adjourned.  The court reasoned that "[d]eciding the allocation of limited state funds in order to achieve the statutorily required balanced budget necessarily involves the exercise of the governor's discretion."

The DISSENT argued that "the governor had a mandatory duty to include in the proposed ...budget a request to fund the arbitration award in this case."  The dissent also argued, "[b]ecause this is a matter of great importance that is subject to recurrence whenever the law requires that a request be included in the governor's proposed budget, this case should be decided regardless of mootness."

IL - Arbitration award reinstating transit authority bus driver violated public policy, where bus driver had been convicted of aggravated criminal sexual abuse.

Chicago Transit Auth v. Amalgamated Transit Union (Illinois Ct App 03/24/2010)
http://case.lawmemo.com/il/cta.pdf

Gibson was discharged from his job as a transit authority bus driver, after the employer learned that Gibson had been convicted of the aggravated criminal sexual abuse of his 12-year-old stepdaughter.  Pursuant to grievance arbitration, an arbitrator ordered Gibson reinstated.  The trial court denied the employer's motion to vacate the arbitration award.  The court reversed, concluding that the award violated the "well-defined and dominant public policies ... in favor of the safe and secure transportation of the public, including children, and the protection of the public, especially juveniles, from convicted sex offenders[.]"  The court noted that Gibson had not successfully completed sex offender treatment, had failed several polygraph examinations regarding his sexual behavior, and admitted that "he engaged in repeated sexual acts with his 12-year-old stepdaughter on so many occasions that he could not count them."

MA - Civilian employee discharged by state police lacked grievance rights under state statute.

Dept of State Police v. MOSES (Massachusetts 04/02/2010)
http://case.lawmemo.com/ma/mapolice.htm

The employer filed an application for a permanent stay of arbitration after the arbitrator found the union's grievance arbitrable. The trial court granted the stay. The Massachusetts Supreme Judicial Court affirmed.

Pino, a chemist, was discharged pursuant to G.L. c 22C, section 9 (removal of civilian employees). The employer argued that section 9 conferred on the employer nondelegable managerial authority to remove civilian employees, making the grievance arbitration outside the arbitrator's authority. The court agreed, concluding that section 9 applied to Pino as an expert (chemist) and granted the employer exclusive and nondelegable authority to appoint and remove civilian experts. The court stated that the exception to this doctrine was limited to constitutionally protected discrimination claims such as gender and race, not discrimination based on union membership and activities. The court noted that there did not appear to be any reason an unfair labor practice based on discharge for union activity could not have been filed with the division of labor relations.

NY - No layoff clause of CBA required public employer to arbitrate abolishment of positions due to economic distress.

Professional Firefighters v. Village of Johnson City (New York App Div 04/08/2010)
http://case.lawmemo.com/ny/firefighters.htm

The union sought a preliminary injunction prohibiting the employer from laying off six firefighters, which the trial court granted. The union served a demand for arbitration on the employer pursuant to the collective bargaining agreement (CBA). The employer commenced a proceeding to permanently stay arbitration. The trial court denied the stay and ordered the parties to proceed to arbitration. The New York Appellate Division affirmed.

The employer argued that its right to abolish positions by reason of economic distress was a nondelegable duty. The court found that the CBA's no-layoff clause was not subject to any prohibition against arbitration; a reasonable job security provision did not violate public policy and Civil Service Law section 80 did not set forth nondelegable duties pertinent to the lay-off provision at issue. As this dispute was reasonably related to the CBA, the court concluded the parties agreed to arbitrate it.

PA - School District's denomination as "special teachers" did not prevent application of CBA to void individual agreements of understanding.

Tunkhannock Area Sch Dist v. TAEA (Pennsylvania Cmnwlth Ct 04/13/2010)
http://case.lawmemo.com/pa/tunkhannock.pdf

The union filed a grievance seeking to have the "special teachers" retroactively hired as either temporary professional or professional employees and subject to the collective bargaining agreement (CBA). The arbitrator ruled in favor of the union. The trial court affirmed. The Pennsylvania Commonwealth Court affirmed.

The "special teachers" were hired with Title II federal money and signed an agreement of understanding. The court noted that, because the "special teachers" hired by the employer performed the same functions as the other teachers, rather than catering specifically to immigrants or teaching some other type of special class, they could not as a matter of law be special teachers. Even assuming they were special teachers, the court stated, under Section 1101 of the Public School Code, that any certified teacher who has been employed to perform the duties of a newly created position immediately became a "temporary professional employee" and, as such, was a part of the bargaining unit governed by the CBA. The court concluded the "special teachers" could not enter into an agreement of understanding contracting away their rights under the CBA.

PA - Act 111 grievance arbitration award didn't require employer to violate Pennsylvania's Confidence in Law Enforcement Act.

State Police v. State Troopers' Assoc (Pennsylvania Cmnwlth Ct 04/13/2010)
http://case.lawmemo.com/pa/statepolice.pdf

The public employer petitioned for review of the portion of an Act 111 grievance arbitration award that sustained a state trooper's grievance, and awarded backpay for the period during which the trooper was suspended.  The court affirmed.  The trooper had been suspended during the pendency of a felony criminal proceeding.  The criminal charge against him was eventually "nolle prossed" ? which led to rescission of the mandatory suspension.  The court rejected the argument that the arbitrator's award required the employer to violate the Confidence in Law Enforcement Act (CILEA), and concluded that the arbitrator didn't exceed his authority in ordering the employer to provide backpay.

IL - Interest arbitration award reinstating public employee didn't violate public policy.

Dept of Central Mgt v. Ndoca (Illinois Ct App 03/23/2010)
http://case.lawmemo.com/il/ndoca.pdf

The public employer appealed the trial court's denial of a petition to vacate a grievance arbitration award reinstating an employee who was discharged for failing a drug test.  The court affirmed, rejecting the employer's arguments that 1) the arbitrator exceeded her authority, because the parties' collective bargaining agreement (CBA) mandated discharge of employees who fail drug tests; and 2) the arbitrator's award violated public policy.  The court determined that the CBA did not mandate discharge "with the clarity which [the employer] asserts."  The court also determined that the employer "failed to demonstrate the existence of a clear public policy that mandates automatic termination for public employees upon the discovery of any illegal drug usage by the employees."