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June 13, 2019

An arbitral awards may vacated, in whole or in part, if it violates a strong public policy, is irrational or clearly exceeds a specifically enumerated limitation on an arbitrator's power

An individual [Petitioner] employed by the Department of Corrections and Community Supervision [DOCCS] was suspended without pay and subsequently served by DOCCS with a notice of suspension charging her with six instances of misconduct and imposing a penalty of dismissal.*

Petitioner waived her right to an agency-level hearing and the matter proceeded directly to arbitration. Following a hearing, the arbitrator, among other things, found Petitioner guilty of two of the charges of misconduct and imposed a one-month suspension as a penalty. The arbitrator also awarded Petitioner back pay for the period of interim suspension prior to the hearing. When DOCCS failed to pay Petitioner back pay for the time of her interim suspension, Petitioner commenced a CPLR Article 75 proceeding to confirm the award. DOCCS cross-moved to vacate the award insofar as it required the payment of back pay for the period of the interim suspension.

Supreme Court confirmed the award, denied DOCCS' cross motion and DOCCS appealed the court's ruling, contending that the arbitrator's award of back pay for the period of interim suspension exceeded his authority.

The Appellate Division overturned the Supreme Court's ruling, pointing out that:

1. "Judicial review of arbitral awards is extremely limited [but] a court may vacate an award when it violates a strong public policy, is irrational or clearly exceeds a specifically enumerated limitation on an arbitrator's power";

2.  "[A]lthough an arbitrator's interpretation of contract language is generally beyond the scope of judicial review, where a benefit not recognized under the governing CBA is granted, the arbitrator will be deemed to have exceeded his or her authority"; and

3. "[I]f the arbitrator imposes requirements not supported by any reasonable construction of the CBA, then the arbitrator's construction[,] in effect, made a new contract for the parties, which is a basis for vacating the award."

Here, the Appellate Division noted, "the arbitrator's award of back pay for the period of interim suspension was based upon a determination that DOCCS lacked probable cause to suspend petitioner." However, said the court, the relevant provision set out in the CBA states that "[s]uspensions without pay . . . shall be reviewable by a disciplinary arbitrator . . . to determine whether the [respondent] had probable cause."

Citing Matter of Livermore-Johnson [New York State Dept. of Corr. & Community Supervision], 155 AD3d at 1394, the court pointed out that it had previously held that hearing evidence should be considered by the arbitrator in determining probable cause." Here, however, the Appellate Division found that the arbitrator "did not rely on the hearing evidence to reach this determination, but instead relied solely on the information contained in the notice of suspension and referenced the Livermore-Johnson decision, which is an earlier decision that he rendered regarding the same CBA but a different employee."

In the words of the Appellate Division, "[i]n Livermore-Johnson, the arbitrator concluded that the suspension notice at issue in and of itself did not establish probable cause [and when reviewed by this Court] we affirmed Supreme Court's judgment vacating the arbitrator's award, holding that the arbitrator exceeded his authority by failing to consider hearing evidence and imposing the new requirement that probable cause be established in the notice of suspension."

Finding the record underlying the instant action "makes clear that the same error occurred here," the Appellate Division said that that portion of the order and judgment that orders back pay for [Petitioner] during the period of interim suspension must be vacated and the matter remitted for a rehearing on that issue."

* The terms of Petitioner's employment were governed by a collective bargaining agreement [CBA] that contained procedures that DOCCS was required to follow when seeking to discipline an employee.

The decision is posted on the Internet at:

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New York Public Personnel Law Blog Editor Harvey Randall served as Principal Attorney, New York State Department of Civil Service; Director of Personnel, SUNY Central Administration; Director of Research, Governor’s Office of Employee Relations; and Staff Judge Advocate General, New York Guard. Consistent with the Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations, the material posted to this blog is presented with the understanding that neither the publisher nor NYPPL and, or, its staff and contributors are providing legal advice to the reader and in the event legal or other expert assistance is needed, the reader is urged to seek such advice from a knowledgeable professional.
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