The threshold decision as to the arbitrability of a matter is to be made by the court absent the parties “clear and unmistakable agreement to arbitrate arbitrability”

The threshold decision as to the arbitrability of a matter is to be made by the court absent the parties “clear and unmistakable agreement to arbitrate arbitrability”
In the Matter of the Arbitration of Sherwood (Kirkpatrick), 2013 NY Slip Op 05372, Appellate Division, Third Department

While a collective bargaining agreement (CBA) was in effect, the Dryden Central School District (District) and Dryden Faculty Association (Association) entered into a separate memorandum of understanding (MOU) in which the parties [1] recognized the Association as the bargaining unit representative for all regularly appointed registered professional nurses working in the District, [2] agreed upon the nurses' terms and conditions of employment, and [3] agreed that the terms and conditions set out in the MOU would remain in effect until incorporated into the next collective bargaining agreement following the expiration of the then current CBA

The District subsequently terminated a nurse represented by the Association* and the nurse grieved the District’s action. When the grievance was denied by the District the Association demanded that the matter be submitted to arbitration. In response the District initiated a proceeding to permanently stay arbitration. The Association counterclaimed seeking a court order to compel arbitration.

Supreme Court granted the District’s petition and permanently stayed the arbitration. The Association appealed, contending that an arbitrator, rather than a court, should decide whether the parties' dispute was arbitrable.

The Appellate Division disagreed with the Association, noting that the responsibility for this threshold determination lies with the courts unless the parties have "evinced a clear and unmistakable agreement to arbitrate arbitrability.” Here, said the court, neither the CBA nor the MOU contains any such agreement and thus Supreme Court properly addressed this issue.

The court explained that “It is well settled that ‘[a] party cannot be compelled to arbitrate in the absence of an express, direct and unequivocal agreement to do so,’" citing Matter of Massana Central School District, 82 AD3d 521.

While the CBA provides for arbitration as the final step of the grievance process, the MOU neither contains its own arbitration provisions nor explicitly incorporated those provisions as set forth in the CBA. Although the Association argued that the CBA's arbitration provisions apply to covered nurses as the MOU does not expressly exclude them, this argument, said the Appellate Division, is unsupported by the terms of the MOU and the rules governing contract interpretation.

The Appellate Division noted that the MOU specifically identified selected provisions of the CBA to be applied to covered nurses and set out detailed additional provisions on several other subjects, including procedures for discharging nurses and terminating their employment, but did not include the arbitration provisions. Accordingly, said the court, as the MOU neither mentions arbitration nor indicates that any CBA provisions other than those expressly stated will apply to nurses, read as a whole, the MOU “unambiguously reflects the parties' intention to establish independent terms and conditions of employment for nurses that do not include the CBA's arbitration provisions.”

The bottom line: Absent an "express, direct and unequivocal agreement" to arbitrate this dispute, the Appellate Division ruled that Supreme Court had properly granted the District’s application to permanently stay the arbitration. To hold otherwise, said the court, would violate the basic principle that "courts may not by construction add or excise terms, nor distort the meaning of those used and thereby make a new contract for the parties under the guise of interpreting the writing"

* The Appellate Division noted that although the nurse's employment was terminated after the end date specified in the CBA, no new agreement has been negotiated, both the CBA and the MOU remain in effect under the Triborough Doctrine {Civil Service Law §209-a [1] [e]).

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2013/2013_05372.htm