August 22, 2019

A party seeking a stay of arbitration alleging a violation of a term set out in a collective bargaining agreement must show that it has not agreed to arbitrate the issue or some other basis barring arbitration


Under what conditions may a party obtain a stay of a demand for arbitration was the significant issue in the litigation involving an alleged violation of a provision set out in a collective bargaining agreement [CBA] negotiated pursuant to Article 14 of the Civil Service Law, commonly referred to as the Taylor Law?

The CBA between the employer [City] and the employee organization [Union] provided that in the event an employee in relevant collective bargaining unit  was  "necessarily absent" from duty as the result of an occupational injury or disease and who was placed on [disability] leave pursuant to §71 of the Civil Service Law, the employee was to receive full salary for a maximum period of nine months during such absence notwithstanding the limitations set out in §71 with respect to "paid leave" while on such disability leave.*

A member of the Union in the collective bargaining unit [Employee] placed on §71 leave and was granted paid disability leave in accordance with the terms set out in the CBA. About a month later the City had Employee examined by its medical expert [Physician]. Physician found that Employee suffered from a mild impairment and that he was then fit perform sedentary work. The Physician also opined that Employee could perform "full duty" within two weeks.

Newburgh directed Employee to report for "sedentary work." When Employee filed to report for work as directed, City removed him from the payroll.

Employee was again examined by the City's medical expert and, again, the Physician found no disability and, again, the City directed Employee to return to work. Employee, again, failed to report for duty as directed.

Next the Union filed a contract grievance claiming that the City had improperly discontinued Employee's disability leave with pay. When the grievance was denied, Union demanded that the matter be submitted to arbitration. City thereupon obtained a court order from Supreme Court staying the arbitration on the grounds that "the issues raised by [Union] were not arbitrable."

The Appellate Division vacated the stay issued by Supreme Court, permitting the arbitration to go forward.

The court pointed out that a party to a collective bargaining agreement may seek a stay of arbitration on the ground that a valid agreement to arbitrate has not been made or under color of some other reason authorized by §7503 of the Civil Practice Law and Rules. In addition, the Appellate Division explained that a court may stay the arbitration when the particular claim to be arbitrated is not within the scope of the arbitration agreement.

Although City had contended that the matter that the Union sought to have submitted to arbitration was not within the scope of the arbitration agreement, the Appellate Division found that the City had not demonstrated any basis justifying staying the arbitration.

The court held that "[A] challenge to the propriety of the City's withdrawal of its grant of paid [disability] leave to [Employee] pursuant to ... the collective bargaining agreement is a claim within the scope of the arbitration clause" set out in the CBA as the agreement, by its terms, provided that "a claim of violation, misinterpretation or misapplication of the terms of a written collective bargaining agreement" was subject to binding arbitration."

The Appellate Division also observed that "the mere fact that the arbitration may entail the incidental interpretation or application of statutes does not compel a different result."

* §71, sometimes referred to as Workers' Compensation Leave, mandates that employees in the classified service be given a leave of absence without pay for at least one year unless the disability is of such a nature as to permanently incapacitate the individual for the performance of the duties of his position. The employee may use sick and other leave or compensatory time credits in order to be retained on the payroll while on §71 leave.

The decision is posted on the Internet at:

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