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Monday, October 24, 2016

Vacating an arbitration award based on allegations the award violated public policy


Vacating an arbitration award based on allegations the award violated public policy
Civil Serv. Empls. Assn., A.F.S.C.M.E. Local 1000, A.F.L.-C.I.O. v County of Nassau, 2016 NY Slip Op 06211, Appellate Division, Second Department

In New York City Tr. Auth. v Transport Workers Union of Am., Local 100, AFL-CIO, 99 NY2d 1, the Court of Appeals ruled that "judicial intervention [in a challenge to an arbitration award] on public policy grounds constitutes a narrow exception to the otherwise broad power of parties to agree to arbitrate all of the disputes arising out of their juridical relationships, and the correlative, expansive power of arbitrators to fashion fair determinations of the parties' rights and remedies." The court further explained that the pubic policy exception applies only in "cases in which public policy considerations, embodied in statute or decisional law, prohibit, in an absolute sense, particular matters being decided or certain relief being granted by an arbitrator.”

When an individual’s employment with the Nassau County Sheriff's Department was terminated he filed a grievance pursuant to the disciplinary procedures of the relevant collective bargaining agreement. The arbitrator designated to hear and determine the matter sustained the grievance and reinstated the individual to his former position with back pay.

The Civil Service Employees Association filed a petition pursuant to CPLR Article 75 on behalf of the individual seeking a court order confirming the arbitration award. Supreme Court granted the petition and Nassau County appealed the ruling in an effort to have the award judicially vacated.

The Appellate Division affirmed the lower court’s decision, explaining that upon timely application, an arbitration award should be confirmed unless the award is vacated or modified upon a ground specified in CPLR 7511, i.e.,

“(i) corruption, fraud or misconduct in procuring the award; or

“(ii) partiality of an arbitrator appointed as a neutral, except where the award was by confession; or

“(iii) an arbitrator, or agency or person making the award exceeded his power or so imperfectly executed it that a final and definite award upon the subject matter submitted was not made; or

“(iv) failure to follow the procedure of this article [75], unless the party applying to vacate the award continued with the arbitration with notice of the defect and without objection.”

The court then noted the two “judicially determined” exceptions set out in Board of Educ. of Arlington Cent. School Dist. v Arlington Teachers Assn., 78 NY2d 33, whereby an arbitration award may not be vacated “unless it violates a strong public policy” or it “is irrational.”

In this instance, said the Appellate Division, the public policy considerations invoked by the Nassau County fail to meet the strict standards for overturning arbitration awards on public policy grounds.

Addressing Nassau County’s argument that the arbitrator’s award should be vacated on the ground of fraud or other misconduct, the court said the contention was “without merit.”

The decision is posted on the Internet at:

Handbooks focusing on State and Municipal Public Personnel Law continue to be available for purchase via the links provided below:

The Discipline Book at http://thedisciplinebook.blogspot.com/

A Reasonable Penalty Under The Circumstances at http://nypplarchives.blogspot.com

The Disability Benefits E-book: at http://section207.blogspot.com/

Layoff, Preferred Lists at http://nylayoff.blogspot.com/

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