Labor & Employment Law

Power of the Arbitrator

By Harvey Randall, Esq.

Power of the Arbitrator
Matter of Buffalo Teachers Fedn., Inc. v Board of Educ. of City School Dist. of City of Buffalo, 2008 NY Slip Op 03763, Decided on April 25, 2008, Appellate Division, Fourth Department

While the arbitrator was considering a contract grievance challenging changing the four health insurance providers set forth in the parties' collective bargaining agreement [CBA] to a single health insurance provider, the District's Executive Director for Human Resources advised a number of teachers that their positions were abolished effective August 31, 2005.

The arbitrator issued an interim award in March 2006 in which he determined that school district had violated the CBA in unilaterally implementing the resolution establishing a single health insurance provider. In addition, the arbitrator said that he would retain jurisdiction and in a subsequent award issued in October 2006, the arbitrator directed that effective January 1, 2007, "the District shall cease its unilateral implementation of the [health insurance provider] resolution" and "shall reinstate forthwith all teachers laid-off on September 1, 2005 . . . with seniority unimpaired, with make whole' monetary damages for back-pay and benefits from lay-off date to reinstatement date and with interest thereon calculated at the statutory judgment rate."

Supreme Court affirmed the arbitrator?s award and the school district appealed.

The Appellate Division held that Supreme Court properly confirmed that part of the award with respect to the resolution establishing single health insurance provider but erred in confirming that part of the award directing the reinstatement of the teachers the district had excessed.

Citing Matter of United Fedn. of Teachers, Local 2, AFT, AFL-CIO v Board of Educ. of City School Dist. of City of N.Y., 1 NY3d 72, the Appellate Division said that ?It is well settled that an arbitration award may be vacated if it is irrational, violates a strong public policy,? or "clearly exceeds a specifically enumerated limitation on the arbitrator's power."

As to the single insurance carrier issue, the court rejected the district?s argument that it had attempted to replicate the health insurance benefits previously provided to Federation?s members. The arbitrator's decision that the district had violated the terms of the CBA by its initial "unilateral modification" of the CBA, rendered specific performance of the contract provision at issue the proper remedy.

The court also commented that ?Absent some indication in the record that, because of the arbitrator's award, [the school district] will be unable to fund a budgetary item that is required pursuant to an explicit statute or regulation, we conclude that the arbitrator's award does not violate a public policy of this state.?

In contrast, the Appellate Division ruled that the arbitrator acted in excess of the power granted to him with respect to that part of the award that directed the reinstatement of those teachers that had been laid off by the district.

The Federation conceded that the CBA does not prohibit the school district from reducing its workforce. Accordingly, concluded the court, the arbitrator?s award with respect directing the reinstatement of the excessed teachers conferred a benefit on teachers to which they were not contractually entitled, i.e., a job security clause, and thereby modified the terms of the CBA in contravention of the explicitly enumerated limitation on his powers.

On this point the Appellate Division noted that "It is well settled that an arbitration award may be vacated if it exceeds a specifically enumerated limitation on an arbitrator's power, and that an arbitrator exceeds his or her authority by granting a benefit not recognized under a governing collective bargaining agreement." Noting that the CBA, in relevant part provides that "arbitrators shall limit their decisions strictly to the application and interpretation of the provisions of this contract, and shall be without power or authority to modify or amend it," the Appellate Division vacated that portion of the arbitrator?s award.

Full post as published by New York Public Personnel Law on April 29, 2008 (boomark / email).