Court holds arbitrator’s misconstruing or disregarding the contract's plain meaning of no consequence as the determination was not irrational

Court holds arbitrator’s misconstruing or disregarding the contract's plain meaning of no consequence as the determination was not irrational
Matter of Buffalo Council of Supervisors v Board of Educ. of City School Dist. of Buffalo, 2010 NY Slip Op 05898, Decided on July 2, 2010, Appellate Division, Fourth Department

Buffalo had earlier negotiated with the Council and other employee unions in an attempt to persuade the unions to accept a single health insurance carrier plan in place of the multiple health insurance carrier plan then required by each union's collective bargaining agreement.* The Council refused to consent to the change and obtained an injunction to prevent respondent from imposing the single health insurance carrier plan on its members. After the School District laid off 26 of its members, allegedly “in anticipation of the budgetary shortfall” because of such refusal, the Council filed two contract grievances.

The Buffalo Council of Supervisors prevailed but Judge Donna M. Siwek, Supreme Court, Erie County, denied the Council CPLR Article 75 petition seeking to confirm the arbitration award that directed the Board of Education to reinstate 17 of its members that had been earlier laid off.

The Appellate Division, however, said that Supreme Court was incorrect in denying the Council’s petition in its entirety as the role of the courts with respect to disputes submitted to binding arbitration pursuant to a collective bargaining agreement is limited, and a court should not substitute its judgment for that of the arbitrator. Unless the arbitration award "is clearly violative of a strong public policy, . . . is totally or completely irrational, or . . . manifestly exceeds a specific, enumerated limitation on the arbitrator['s] power," the award must be confirmed.

As the arbitrator’s interpretation of the agreement to provide the Association with “an opportunity to be heard on the layoff and method of layoff of 26 assistant principals” is rationally based on the plain language of the relevant contract provision and to “the extent, if any, to which ‘the arbitrator may have misconstrued or disregarded the plain meaning of the contract’ is of no moment where, as here, the arbitrator's determination is not irrational.”

In contrast, said the Appellate Division, Supreme Court “properly refused to confirm that part of the arbitration award determining that [the school district violated Article 4 of the CBA] and directing [the school district] to reinstate all but the nine least senior assistant principals who had been laid off."

The arbitrator explicitly recognized that school district had the authority to lay off employees for economic reasons without violating the CBA but nevertheless concluded that the Council “bore a disproportionate share of the projected budgetary shortfall.” This was was incorrect as it was based on "the financial savings that resulted from the layoffs of Council's members against the $800,000 projected budgetary shortfall directly related to its refusal to accept the single health insurance carrier plan rather than against the $12 million projected overall budgetary shortfall for the fiscal year."

The court also faulted the arbitrator for failing to account for those laid-off employees who were not members of Council in his “determination of proportionality.” Accordingly, said the Appellate Division, “that part of the arbitration award is irrational because ‘there is no proof whatever to justify [it].'”

* (see generally Matter of Buffalo Teachers Fedn., Inc. v Board of Educ. of City School Dist. of City of Buffalo, 50 AD3d 1503, lv denied 11 NY3d 708).

The Council decision is posted on the Internet at: http://www.courts.state.ny.us/reporter/3dseries/2010/2010_05898.htm