January 22, 2019

Guidelines for confirming an award issued pursuant to compulsory interest arbitration


Guidelines for confirming an award issued pursuant to compulsory interest arbitration
Matter of Walker (Read), 2019 NY Slip Op 00340, Appellate Division, Third Department

The collective bargaining agreement [CBA] for uniformed firefighters [Firefighters] employed by the City of Plattsburgh [Plattsburgh], with the exception of the Fire Chief and the Assistant Fire Chief, expired. Since the expiration of that CBA the Firefighters and Plattsburgh had participated in compulsory interest arbitration three times to resolve disputes that arose during their negotiations of successor agreements as provided by Civil Service Law §209[4]).

In 2016 an arbitration award covering the 2012-2013 contract period granted the firefighters a 2% wage increase for 2012 and 2013, carried through 2017, and directed that all retroactive payments be disbursed within 45 days of the award.*  

Plattsburgh, however, failed to implement the mandated wage increases and make the required retroactive payments whereupon Firefighters commenced a CPLR §75.10 proceeding seeking to confirm the arbitration award. Plattsburgh, on the other hand, cross-moved to vacate the award as being "violative of public policy and exceeding the scope of the panel's authority."

Supreme Court granted the Firefighters application to confirm the award and denied Plattsburgh's cross motion, prompting Plattsburgh's appealing the Supreme Court's decision.

As a general policy of supporting and encouraging the resolution of disputes through arbitration (see Matter of City of Oswego [Oswego City Firefighters Assn., Local 2707], 21 NY3d 880, judicial interference with an arbitration award is confined to narrowly circumscribed circumstances. Courts may vacate an arbitration award if the arbitrator exceeded his or her authority by issuing an award that violates a strong public policy, is irrational or clearly exceeds a specific, enumerated limitation on the arbitrator's power (see Matter of Shenendehowa Cent. Sch. Dist. Bd. of Educ. [Civil Serv. Empls. Assn., Inc., Local 1000, AFSCME, AFL-CIO, Local 864], 20 NY3d 1026.**

Addressing Plattsburgh's argument that the arbitration award should be vacated on the basis that it violated public policy, the court said that in granting relief on such grounds "courts must be able to examine [the] arbitration ...  award on its face, without engaging in extended fact-finding or legal analysis, and conclude that public policy precludes its enforcement." In other words, said the Appellate Division, "judicial inquiry is constrained to determining whether 'the actual result of the arbitration process' — without evaluation of the underlying rationale — on its face, and 'because of its reach, . . . violates an explicit law of this [s]tate'."

Plattsburgh contended that the enactment of Chapter 67 of the Laws of 2013 demonstrated that a strong state public policy exists "to control and stabilize the [general] fund balance and real property tax levies of 'fiscally eligible municipalities' who are experiencing ongoing fiscal distress," arguing that the award of a 2% salary increase for 2012 and 2013, carried through 2017, would deepen Plattsburgh's fiscal crisis by requiring it to completely deplete its general fund balance and raise taxes over the tax cap.

The Appellate Division said that Plattsburgh's reliance on such an argument was misplaced, explaining that, as  relevant here, Chapter 67 established a permanent financial restructuring for local governments to "provide a meaningful, substantive avenue for fiscally eligible municipalities to reform and restructure and provide public services in a cost-effective manner," while also setting "new parameters for arbitration awards" involving fiscally eligible municipalities.

Where, as here, the public interest arbitration panel determines that the public employer is a fiscally eligible municipality, the panel must, "first and foremost, consider [the public employer's] ability to pay by assigning [that criterion] a weight of [70%]", while assigning an aggregate weight of 30% to the remaining statutory criteria set out in Civil Service Law §209 subdivisions [4][c][v] and [6][e].

In the view of the Appellate Division, the amendments relied upon by Plattsburgh did not a "reveal strong and well-defined policy considerations prohibiting, in an absolute sense, the relief awarded here — that is, the 2% salary increases and the retroactive payments flowing therefrom" but rather "clearly evince a general policy recognizing the importance of considering, during the arbitration process, the fiscal status of fiscally-distressed municipalities" and the law requires only that, "when resolving a dispute and fashioning an award, the public interest arbitration panel accord a weight of 70% to a fiscally eligible municipality's ability to pay."

Concluding that the arbitration panel had complied with its mandate and the required 70% weighting factor, the Appellate Division said it could not reweigh the statutory factors and substitute its judgment for that of the arbitration panel nor could it engage in the extended fact-finding or legal analysis required by Plattsburgh's argument.

Finding that the arbitration award was not prohibited by a strong and well-defined policy embodied in law, the Appellate Division concluded that there was no basis upon which to invoke the public policy exception to vacate the arbitration award. Further, ruled the court, there was no merit to Plattsburgh's argument that the arbitration award mandated legislative action and in its absence, the panel exceeded the scope of its authority.

* Before issuing this arbitration award, the panel offered the parties an opportunity to consent to an alternate proposed opinion and award granting the panel the authority to issue a determination addressing more than a two-year period and, if agreed to, providing for, among other things, a 1.5% wage increase for 2012, 2013 and 2014 and a 1.75% wage increase for 2015, 2016 and 2017. However, the Common Council of the City of Plattsburgh unanimously rejected this alternate proposed opinion and award. 

** Citing Matter of Kowaleski [New York State Dept. of Correctional Servs.], 16 NY3d 85, the Appellate Division observed that "Even where an arbitrator has made an error of law or fact, courts generally may not disturb the arbitrator's decision".

The decision is posted on the Internet at:

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