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June 29, 2012

Broad arbitration clause precludes judicial interpretation of a collective bargaining agreement where “public policy” is not at issue


Broad arbitration clause precludes judicial interpretation of a collective bargaining agreement where “public policy” is not at issue
City of Utica v Teamsters, Chauffeurs, Warehousemen & Helpers Local Union 182, 21 Misc 3d 1109(A), Affirmed by the Appellate Division, 41 AD3d 1232

The Teamsters filed a contract grievance alleging that a member of the collective bargaining unit had been terminated by the City “without just cause” and in violations of the “progressive discipline” procedures set out in the relevant collective bargaining agreement. When Utica rejected its demand for arbitration, the Teamsters sued seeking a court order compelling arbitration; the City resisted, contending that the employee in question was “on probation” and thus an “employee-at-will.” Justice Hester said that a “Court's analysis in this matter is governed by …. §7501 [of the CPLR which] provides that "[i]n determining any matter arising under this article, the court shall not consider whether the claim with respect to which arbitration is sought is tenable, or otherwise pass upon the merits of the dispute."

Accordingly, a court's role in reviewing applications to stay arbitration is a limited one and it is not the Court's role to interpret substantive provisions of the contract or to pass on the merits of the dispute.

In this matter neither party contended that submitting the issue to arbitration implicates a “public policy” issue. Accordingly, the question as to whether arbitration was authorized because “the parties did agree by the terms of their particular arbitration clause to refer their differences in this specific area to arbitration."

Noting that there was a “broad arbitration clause” set out in the collective bargaining agreement, Justice Hester concluded that each of the objection raised by the parties such as the City’s claim that this particular grievance is not arbitrable and the Teamsters’ claim that Utica violated “past practice” was a contract interpretation and thus issues for the arbitrator to resolve.

In addition, Justice Hester pointed out that the City’s claim that the grievance was untimely filed was also an issue involving contract interpretation and thus ripe for an arbitrator to decide.

Indicating that “it is not the Court's duty to examine the scope of the substantive provisions of the contract to determine whether this particular grievance falls within the scope” of the collective bargaining agreement, Justice Hester denied the City’s petition seeking a stay of the arbitration.

The full text of the decision is posted on the Internet at:
http://www.nycourts.gov/reporter/3dseries/2006/2006_52623.htm

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