The State Constitution’s prohibition of gifts of public funds is not necessarily applicable in situations involving labor-management relations between public employees and public employers under the Taylor Law
2015 NY Slip Op 03837, Appellate Division, Second Department
Introducing its decision in this appeal with the statement "Judicial review of an arbitrator's award is extremely limited," the Appellate Division explained that "A party seeking to overturn an arbitration award on one or more grounds stated in CPLR 7511(b)(1) bears a heavy burden, and must establish a ground for vacatur by clear and convincing evidence."*
In this action, Nassau County, the Appellant, asked Supreme Court to vacate an adverse arbitration award on the grounds that the award was against public policy. Supreme Court denied the County's motion and confirmed the arbitrator’s decision against the County, sustaining the arbitrator's award of $27,049.20 against Nassau.
The Appellate Division subsequently rejected the County’s appeal of the Supreme Court's ruling.
The court said that an arbitration award violates public policy “only where a court can conclude, without engaging in any extended fact-finding or legal analysis, that a law prohibits the particular matters to be decided by arbitration, or where the award itself violates a well-defined constitutional, statutory, or common law of this state," citing Reddy v Schaffer, 123 AD3d 935.
Addressing Nassau County's argument that the payment of public funds as damages for its breach of a contractual obligation under a collective bargaining agreement was prohibited by Article VIII, §1, of the New York State Constitution,** the Appellate Division rejected the County’s theory, citing Gagliardo v Dinkins, 89 NY2d 62.
In Gagliardo the Court of Appeals said “the constitutional prohibition on gifts of public funds is not necessarily subject to statutory definitions of terms or conditions of employment for purposes of governing labor-management relations between civil service employees and public or governmental employers under the Taylor Law.”
Finally, the Appellate Division found that the challenged arbitration award did not exceed a specifically enumerated limitation on the arbitrator's power, rejecting Nassau County’s argument to the contrary.
Accordingly, said the Appellate Division, Supreme Court properly denied the County’s petition to vacate the arbitration award and properly confirmed the award, entering judgment against Nassau in the principal sum of $27,049.20.
* Essentially, an arbitration award may be vacated if the court finds that the rights of a party were prejudiced by (1) corruption, fraud, or misconduct in procuring the award; (2) partiality of an arbitrator; (3) the arbitrator exceeded his or her power; or (4) the failure to follow the procedures of CPLR Article 75. In addition, an arbitration award may be vacated pursuant to CPLR §7511(b)(1)(iii) where "an arbitrator . . . exceeded his or her power," which includes those circumstances in which the award "violates strong public policy, is irrational, or clearly exceeds a specifically enumerated limitation on the arbitrator's power."
** Article VIII, 1, prohibits, in pertinent part, the making of a gift of public monies.
The decision is posted on the Internet at: