Public policy and arbitration

Public policy and arbitration
NYC Transit Authority v Transport Workers Union, 279 AD2d 474

A New York City Transit Authority [NYCTA] employee was charged with failing to follow the proper procedure in applying the brakes on the subway train he was operating. This resulted in an accident and the derailment of the train. Dismissed from his position, the individual filed a grievance challenging his termination.

A Tripartite Arbitration Board denied the employee's grievance but imposed a lesser penalty -- demotion for not more than six months. NYCTA filed an Article 75 petition seeking to vacate the penalty imposed by the Board on the grounds the modification “was against public policy.”

The Appellate Division reversed a lower court's decision affirming the arbitration award that specifically vacated “so much of the arbitration award as reduced the penalty imposed from dismissal to demotion.”

Clearly an arbitration award may not be vacated unless it is violative of a strong public policy, is irrational, or clearly exceeds a specific limitation on an arbitrator's power. Here, however, the court concluded that the panel's changing the penalty imposed on the employee from dismissal to demotion was contrary to public policy.

The Appellate Division explained that the NYCTA “has an important statutory duty to operate the transit system for the safety of the public.” Requiring NYCTA to reinstate an employee who has been found to be a threat to public safety is both contrary to public policy and to NYCTA's statutory duty to operate the transit system safely. The decision also noted that the employee involved had two prior operational suspensions.