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November 30, 2016

Tests applied by the courts in determining if a demand to arbitrate a grievance pursuant to the terms of a collective bargaining agreement should be granted


Tests applied by the courts in determining if a demand to arbitrate a grievance pursuant to the terms of a collective bargaining agreement should be granted
Locust Valley Central School District v Benstock, 2016 NY Slip Op 07299, Appellate Division, Second Department [Matter #1]
Locust Valley Central School District v Locust Valley Teachers' Association 2016 NY Slip Op 07299, Appellate Division, Second Department [Matter #2]

The relevant collective bargaining agreement [CBA] between Locust Valley Teachers' Association [LVTA] and the Locust Valley Central School District [School District] provided that either party had the right to submit a grievance to arbitration in the event the grievance was not resolved by the School District. The CBA defined a "grievance" as "a claimed violation, misinterpretation or inequitable application [of a] provision of th[e] Agreement."

LVTA filed a grievance against the School District concerning the School Districts commencing a plenary action* against a teacher formerly employed by the School District. The former teacher was a member of the LVTA and presumably in the collective bargaining unit represented by LVTA.

In the plenary action, the School District sought, under a "faithless servant" theory,**the forfeiture of all compensation earned by the former teacher pursuant to the CBA during a period of time in which the teacher allegedly engaged in certain criminal conduct. That conduct ultimately resulted in the teacher's plea of guilty to several criminal charges.

In an action (Matter #1) and a related proceeding pursuant to CPLR article 75 to permanently stay arbitration of a grievance (Matter #2), the School District in Matter #2 appealed from an order of the Supreme Court which denied its petition seeking a stay of arbitration and granted LVTA’s motion to compel arbitration of the grievance.

The Appellate Division affirmed the Supreme Court’s ruling in Matter #2.

The court explained that the determination of whether a dispute between a public sector employer and employee is arbitrable is subject to a two-prong test.

The court must first if there is any statutory, constitutional, or public policy prohibition against arbitrating the grievance. In the event it finds no such prohibition, the court must review the relevant collective bargaining agreement between the parties and determine if they, in fact, agreed to arbitrate the particular dispute.

Citing Board of Educ. of Watertown City School Dist. [Waterman Edu. Assn.], 93 NY2d 132, the Appellate Division said that in examining the collective bargaining agreement, must "merely determine whether there is a reasonable relationship between the subject matter of the dispute and the general subject matter of the [agreement]." If there is such a relationship, said the Appellate Division, "the court should rule the matter arbitrable, and the arbitrator will then make a more exacting interpretation of the precise scope of the . . . provisions of the [collective bargaining agreement], and whether the subject matter of the dispute fits within them."

In determining whether a matter is arbitrable, however, the court may not "consider whether the claim with respect to which arbitration is sought is tenable, or otherwise pass upon the merits of the dispute."

Finding that the School District had not identified any statutory, constitutional, or public policy prohibition against arbitrating the grievance, the Appellate Division affirmed the Supreme Court’s decision. In the words of the Appellate Division, the fact that “the grievance concerns the right of the School District to bring a plenary action seeking the equitable forfeiture of compensation paid to the teacher under the CBA establishes “a reasonable relationship between the grievance and the CBA.”

* A lawsuit where the merits are fully investigated and discussed and the decision is not based on another lawsuit.

** The "faithless servant doctrine" states that an individual owing a duty of fidelity to a principal and who is faithless in the performance of his or her services generally cannot recover his or her compensation or other consideration that would be otherwise available to that individual [Murray v Beard, 102 NY 505]. See, also, http://publicpersonnellaw.blogspot.com/2010/02/applying-faithless-servant-doctrine.html

The decisions in Matter #1 and Matter #2 are posted on the Internet at:

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