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November 19, 2010

Tests applied by courts considering vacating an arbitration award

Tests applied by courts considering vacating an arbitration award
Recore v Chateaugay CSD, 256 AD2d 801, motion for leave to appeal dismissed, 93 NY2d 957

In Recore v Chateaugay Central School District, the Chateaugay district asked to have an arbitrator’s award vacated. The arbitrator had ruled that the district had violated a clause of its collective bargaining agreement with CSEA Local 1000 when it failed to appoint Deborah Recore, a teacher’s aide, to the position of kindergarten aide.

The contract clause involved provided that “[f]or the purposes of filling vacancies or new job openings ... [the district] shall consider both ... seniority and ... skills and abilities. Seniority shall be the determining factor when in the sole judgment of [the district] the affected applicant’s skills and abilities are equal.”

A State Supreme Court justice vacated the arbitrator’s award. The arbitrator erred by inserting the word “relatively” before “equal” in interpreting the contract provision.

This, the court said, meant that “the arbitrator failed to apply the language of the collective bargaining agreement” in resolving the grievance.

CSEA appealed. The Appellate Division decided that the award had defects that “render it irrational,” but did not use the same reasoning as the Supreme Court.

In its decision, the Appellate Division noted that the grounds for vacating an arbitration award are very limited. It said that an arbitration award will be vacated only where “it is violative of a strong public policy, is totally irrational or clearly exceeds a specifically enumerated limitation on the arbitrator’s power.”

It ruled that “given the considerable discretion afforded arbitrators in interpreting contract language [an arbitrator’s insertion of the word relatively] was an insufficient basis to invalidate the award.”

The Appellate Division emphasized that broad powers are vested in an arbitrator. Unless there is a provision in the arbitration clause to the contrary, an arbitrator is not bound by principles of substantive law or the rules of evidence and “may do justice by making an award reflective of the spirit rather than the letter of the parties’ agreement.”

Accordingly, said the court, an arbitrator’s interpretation of the parties’ agreement “may disregard the apparent, even the plain, meaning of the words of the contract before him and still be impervious to challenge in the courts.”

The Appellate Division found other defects in the arbitration award. The court noted that there were two different grievances arbitrations filed by Recore against the district.

The first concerned Recore’s not being selected for one kindergarten aide vacancy and the second concerned Recore’s not being selected for a second kindergarten aide vacancy.

According to the decision, apparently the arbitrator who conducted the second arbitration, Michael Lewandowski, “based his disposition [of the grievance] on the outcome of the first grievance” decided by another arbitrator, Walter Donnaruma.

Donnaruma had ruled that the district should have “utilized seniority as the primary consideration” with respect to Recore’s application for the first vacancy filled by the district and remitted the grievance to the district for its reconsideration. Upon reconsideration, the district reaffirmed its original decision.

Lewandowski considered the grievance that was filed after Recore was not selected for the second vacancy that the district filled.

The Appellate Division said “there is no discussion [of Recore’s] application for the second vacancy which culminated in the filing of the grievance that actually was before arbitrator Lewandowski, nor the evidence adduced at the hearing with respect to [Recore’s] and the chosen candidate’s qualifications for the position.”

In other words, the court concluded that Lewandowski based his decision of the determinations made by Donnaruma in the first arbitration.

Affirming the vacating of Lewandowski’s award because of this procedural defect rather than for the reasons stated by the lower court regarding Lewandowski’s interpretation of the contract’s language, the Appellate Division said that “inasmuch as [Lewandowski’s] disposition [of the grievance] leaves the controversy unresolved, a rehearing should be ordered” by the Supreme Court.
NYPPL

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