About three months after collective bargaining agreement [CBA] between the School District [District] and the Employee Organization [Local 811] had expired the parties entered into a memorandum of agreement that extended the CBA, with certain modifications, through 2020. These modification included changes with respect to employee prescription drug benefits. Local 811 subsequently filed a grievance with the District challenging the change to the prescription drug coverage as applied to retirees.
The District denied the grievance, finding that [1] it was untimely; [2] Local 811 did not represent retirees;*and [3] there was nothing in the CBA prohibiting this change. When, ultimately, Local 811 demanded that the grievance be submitted to arbitration, the District initiated a CPLR Article 75 action seeking a court order to permanently stay arbitration.
Supreme Court found that the matter was arbitrable, dismissed the District's petition and the District appealed Supreme Court's ruling to the Appellate Division. The Appellate Division sustained the Supreme Court's ruling.
Explaining that the court's role in reviewing applications to stay arbitration is a limited one, the Appellate Division said that central inquiry is whether the dispute is arbitrable, citing City of Johnstown [Johnstown Police Benevolent Assn.], 99 NY2d 273. The Appellate Division then opined that to show that a CBA dispute is arbitrable requires proof that [a] it is lawful to arbitrate the dispute and [b] the parties have agreed to arbitrate such a dispute. In this action, however, the court said that the only question to resolve was [b] -- whether the parties agreed to arbitrate the dispute at issue.
To determine whether parties so agreed requires the court to examine the [CBA] to ascertain whether CBA contains a "broad arbitration clause," and if it does the court will find an "agreement" to arbitrate if "there is a reasonable relationship between the subject matter of the dispute and the general subject matter of the CBA." In contrast, specific contentions related to the scope of the CBA or interpretation of its substantive provisions are to be determined by an arbitrator.
In this instance the court found that the CBA's grievance procedure was intended to "establish a more harmonious and cooperative relationship between the non-instructional staff and [the District]" which, in this context said the Appellate Division, mandates that the CBA's provisions to be "liberally construed for the accomplishment of this purpose."
Further, the CBA broadly defines a grievance as "any claimed violation, misinterpretation, or inequitable application of [the CBA] or of any laws, rules, procedures, regulations, administrative order or work rules of the [individual designated by management to review and resolve grievances], or those matters affecting employees' health or safety, physical facilities, materials or equipment furnished to the employees or supervision of employees, or any other matter(s), in which the employee feels he [or she] has been dealt with unfairly." The CBA's grievance procedure provides, as the final step in the processing of a grievance, arbitration of the dispute.
Considering "the breadth of this language, lack of any exception for grievances concerning retirement benefits, and the CBA's provisions expressly addressing [prescription drug] coverage for retirees ..." the Appellate Division concluded that there was a reasonable relationship between the dispute and the subject matter of the CBA such that the dispute was arbitrable.
Although the District sought to read the terms "staff" and "employee" to narrow the ambit of the arbitration clause and specifically to exempt retirees from having the right to bring a grievance, the Appellate Division held that such a specific contention is not relevant to the threshold analysis of arbitrability but, instead, concerns the scope and substance of the CBA. Accordingly, the court ruled that the issue should be "determined by an arbitrator" rather than the court.
* Typically retirees are not in the collective bargaining negotiating unit but may be entitled to certain benefits set out in a collective bargaining agreement where specifically so provided.
The decision is posted on the Internet: