January 11, 2019

Administrative due process trumps an employer's claim to a "management right" to summarily terminate an employee for cause

Administrative due process trumps an employer's claim to a "management right" to summarily terminate an employee for cause
Matter of the Arbitration between the Town of Greece Guardians' Club, Local 1170 and the Town of Greece, 2018 NY Slip Op 08775, Appellate Division, Fourth Department

Supreme Court rejected the Guardians' Club, Local 1170's [Local 1170] petition to confirm an arbitration award and granted the Town of Greece's [Town] cross petition to vacate the arbitration award. The Appellate Division unanimously reversed the Supreme Court's ruling "on the law" and confirmed the arbitration award in favor of Local 1170.

The genesis of the demand for arbitration was the Town's chief of police terminating an employee for alleged misconduct without "notice and hearing." Local 1170 filed a grievance on behalf of the employee and ultimately demanded that the matter be submitted to arbitration as provided the Collective Bargaining Agreement [CBA] between the Town and Local 1170.

The arbitrator, noting that the Collective Bargaining Agreement [CBA] between the Town and Local 1170  allowed the Town to terminate the grievant "for cause," opined that the term "for cause" was synonymous with the term "just cause," and that "just cause encompasses some degree of due process." Finding that the grievant's termination fell short of the requirements of due process,* the arbitrator concluded that the grievant "was not provided even rudimentary due process" prior to being terminated and thus the employee's termination "must be found to be without just cause."

Among the defects in failing to provide the grievant with "due process" identified by the arbitrator were the following:

1. The termination letter that the chief of police delivered to the grievant at their meeting was broadly worded and failed to provide her with notice of the charges against her.

2. The grievant was not given an opportunity to respond to the charges of alleged misconduct before the chief of police made the decision to terminate the grievant.

3. The chief of police did not conduct a full and fair investigation inasmuch as he failed to interview a key witness to the alleged misconduct, the grievant herself.

Accordingly, the arbitrator concluded that there was a failure to provide the grievant with "even rudimentary due process" and thus the grievant's "termination must be found to be without just cause" and Local 1170's grievance sustained.

In affirming the arbitrator's decision the Appellate Division noted that "It is well settled that judicial review of arbitration awards is extremely limited", citing Wien & Malkin LLP v Helmsley-Spear, Inc., 6 NY3d 471, cert dismissed 548 US 940, explaining that a ruling by an arbitrator is reviewable only pursuant to CPLR §7511(b), which states in relevant part: "The award shall be vacated on the application of a party who either participated in the arbitration or was served with a notice of intention to arbitrate if the court finds that the rights of that party were prejudiced by . . . 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."

When does an arbitrator exceed his or her power under the statute? When, said the Appellate Division, "his [or her] award violates a strong public policy, is irrational or clearly exceeds a specifically enumerated limitation on the arbitrator's power", citing Kowaleski, 16 NY3d at 90 [also see Matter of Town of Tonawanda [Town of Tonawanda Salaried Workers Assn.], 160 AD3d 1477,  leave to appeal denied 32 NY3d 908].

Outside of these narrowly circumscribed exceptions, courts lack authority to review arbitral decisions, even where an arbitrator has made an error of law or fact. Indeed, notes the decision, "An arbitrator is not bound by principles of substantive law or rules of evidence, and may do justice and apply his or her own sense of law and equity to the facts as he or she finds them to be", citing Matter of NFB Inv. Servs. Corp. v Fitzgerald, 49 AD3d 747. Further, said the Appellate Division, courts lack the power to review the legal merits of the arbitration award, or to substitute the court's judgment for that of the arbitrator, "simply because it believes its interpretation would be the better one."

Supreme Court had vacated the arbitrator's award after it determined that "the arbitrator exceeded a limitation on his power when he determined that the grievance was arbitrable." In the words of the Appellate Division, "Even if the court is correct that the issue of arbitrability was not before the arbitrator, [the Town] conceded on appeal that the grievance was arbitrable. Thus, even assuming, arguendo, that the arbitrator exceeded a limitation on his power, we conclude that [the Town] was not prejudiced by his determination. Absent a showing of prejudice, the court lacks the authority to vacate an arbitration award where, as here, the matter is before the court on the application of a party who participated in the arbitration."**

The Appellate Division said that Supreme Court also erred insofar as it vacated the award on the ground that the arbitrator exceeded a limitation on his power by adding a substantive provision that was not included in the CBA by reason of "the absence of a stand-alone article [in the CBA] pertaining to employee discipline."  However, the "for cause" language set out in the management rights provision relied upon by Supreme Court expressly circumscribed the Town's right to discipline or discharge the grievant and the arbitrator had interpreted that language, consistent with arbitral precedent, as incorporating "a just cause standard that encompasses a right to due process."

Finally the Appellate Division indicated that it had concluded that "the arbitrator merely interpreted and applied the provisions of the CBA, as [he] had the authority to do."

* At the arbitration hearing the chief of police testified that he had made the decision to terminate the employee before meeting with the grievant. In addition, the Town conceded  that the grievant was entitled to notice and a hearing pursuant to Civil Service Law §75, and that the Town had  failed to comply with that statute. 

** The Appellate Division also explained that Supreme Court further erred in determining that the arbitration award was irrational, indicating that "An award is irrational if there is no proof whatever to justify the award". Noting that a court must confirm the award where "the arbitrator offer[ed] even a barely colorable justification for the outcome reached," in this instance the Appellate Division described the arbitration award as a thoughtful, well-reasoned opinion and award based on the hearing testimony of the chief of police and the undisputed evidence in the record, concluding that the arbitrator's award was not irrational.

The decision is posted on the Internet at:


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