Modifying a disciplinary penalty

Modifying a disciplinary penalty
CSEA Albany County Local 801 v Albany Housing Authority, 266 AD2d 676

This decision sets out the basic elements to be considered by courts when asked to confirm or vacate a disciplinary arbitrator’s award.

The facts in this case are relatively simple. Frank Turner, an Albany Housing Authority custodian, was found smoking marijuana in a vacant authority apartment in violation of authority rules. Turner was dismissed and Local 801 demanded arbitration in accordance with the collective bargaining agreement between the parties. Local 801 and the authority agreed to submit the following issues to the arbitrator:

1. Was Turner was guilty of violating the authority’s policy and procedures prohibiting entry into vacant apartments and the unlawful possession or use of marijuana; and

2. Was the penalty imposed - termination - for this violation unreasonable or made in bad faith.

The local and the authority, however, could not agree as to whether the arbitrator had the power to fashion a new or different penalty in the event Turner was found guilty of the charges. Accordingly, this issue in the disciplinary arbitration was not certified to the arbitrator.

Ultimately the arbitrator found Turner guilty of the charges. But, said the arbitrator, imposing the penalty of termination was unreasonable. The arbitrator, concluding that “he had the power to modify the penalty,” imposed a different penalty on Turner: a four-week suspension and reinstatement with back pay.

Local 801 brought an Article 75 action to confirm the award; the authority countered with a petition to reinstate the penalty of dismissal on the grounds that the arbitrator had exceeded his authority.

A State Supreme Court justice confirmed the arbitrator’s award insofar as it determined Turner was guilty of the charges filed against him. The court, however, ruled that the arbitrator had exceeded his authority by imposing a new and different penalty and vacated that portion of the award. Local 801 appealed.

The relevant contract provision -- Article 15.3 -- provided that “[t]he arbitrator shall only determine if guilt or misconduct or incompetence has been proven by a preponderance of the evidence and if the penalty was imposed in bad faith or was unreasonable. On the issue of the penalty, the employee’s entire record of employment may be considered.”

In resolving the appeal, the Appellate Division set out the following basic points:

1. Judicial review of an arbitration award is severely limited and will be upheld unless “it is violative of a strong public policy, is totally irrational or clearly exceeds a specifically enumerated limitation on the arbitrator’s power.”

2. Any limitation upon the remedial power of the arbitrator must be clearly contained, either explicitly or incorporated by reference, in the arbitration clause itself.

3. To infer a limitation from an ambiguous and general clause in the substantive provisions of the agreement would, in effect, require judicial interpretation of the contract and judicial interference with an arbitration award which should be avoided unless that award be violative of strong public policy, totally irrational or in excess of a specifically enumerated limitation upon arbitral authority.

The Appellate Division concluded that Article 15.3 contains a specific limitation of the arbitrator’s authority and restricts the arbitrator to making two decisions: (1) was the employee’s guilt proven by a preponderance of the evidence and, if so, (2) was the penalty imposed in bad faith or unreasonable.

Further, said the court, Section 15.3 of the agreement does not permit the arbitrator to impose a new or different penalty and that the arbitrator acted “in excess of a specifically enumerated limitation upon arbitral authority” when he modified the penalty imposed on Turner.

Finding that “... the arbitrator’s interpretation results in a new and different contract for the parties,” the Appellate Division sustained the lower court’s vacating that portion of the arbitrator’s award that imposed a different penalty.

In other words, although the arbitrator could determine if the penalty imposed was unreasonable, neither Article 15.3 nor the questions submitted to the arbitrator by the parties permitted the arbitrator to determine an alternative penalty.

If the arbitrator determines that the penalty imposed was unreasonable or made in bad faith, presumably Article 15.3 requires the arbitrator to return the matter to the authority for it to set a different penalty.
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