As the result of unilateral changes in bus schedules that affected bus operators' ability to select their work hours and days off, the employee organization [Respondent] representing the bus operators filed a grievance on their behalf alleging that the employer [Petitioner] had violated the CBA by improperly altering the scheduling process without prior negotiation and agreement and requesting reinstatement of the prior scheduling procedure. After failing to reach a resolution during the three-step grievance process specified in the collective bargaining agreement [CBA], Respondent submitted the grievance to arbitration.
Following a hearing, the arbitrator issued an opinion and award finding that the new scheduling procedure adopted by Petitioners violated certain articles set out in the CBA and directed petitioners to resume use of the prior scheduling procedure that and, further, to negotiate with Respondent before implementing any changes to that procedure.
Petitioners commenced filed a petition pursuant to CPLR §7511 seeking to vacate the arbitration award on the basis that the arbitrator exceeded the scope of his authority under the CBA. Respondent answered and filed a cross petition seeking to confirm the arbitration award.
Finding that the CBA was reasonably susceptible to the construction applied by the arbitrator, Supreme Court denied Petitioners' application to vacate the arbitration award and granted Respondent's cross petition to confirm the award. Petitioners appeal.
The Appellate Division affirm the Supreme Court's ruling, explaining that " Judicial review of arbitral awards is extremely limited [and] 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." In contrast, a court may not vacate an award based on its disagreement with the reasoning or outcome, even if the arbitrator made errors of law or fact.
Essentially an arbitrator's interpretation of contract language is generally beyond the scope of judicial review. The Appellate Division then opined that where a benefit not recognized under the governing CBA is granted, the arbitrator will be deemed to have exceeded his or her authority. On the other hand, if the contract is reasonably susceptible to different conclusions, including the one given by the arbitrator, courts will not disturb the award. Further, in the event 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.
Essentially the arbitrator found that the work selection procedure that had existed for over 40 years was a well-established past practice that could not be unilaterally altered by petitioners but must be continued unless changed by mutual agreement.
Finding that the CBA was "reasonably susceptible of the interpretation given to it by the arbitrator," the Appellate Division held that Supreme Court properly dismissed Petitioners' application to vacate the arbitration award and properly granted Respondent's application to confirm the award.
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