May 21, 2021

Arbitrator's award in a disciplinary arbitration of alleged sexual harassment charges vacated as violative of public policy

The appointing authority [Employer] issued a notice of suspension and a notice of discipline to an employee [Respondent] advising him of his immediate suspension, without pay based on various disciplinary charges related to allegations of sexual harassment in the workplace. The notices specified that the Employer was seeking a penalty terminating Respondent's employment. Ultimately the matter proceeded to arbitration pursuant to a collective bargaining agreement [CBA] between the Employer and Respondent's collective bargaining representative.

Following a hearing, the arbitrator issued a "Decision and Award" sustaining four of the 13 charges served on Respondent and determined that:

1. There was probable cause for the interim suspension;

2. There were "certain mitigating factors warranted a penalty less than termination; and

[3] Characterized the Decision and Award as "a final warning" to Respondent that "any repeat of offending conduct will most surely result in [Respondent's] termination."

Employer initiated a CPLR Article 75 proceeding seeking to vacate the arbitration award, contending that the penalty was against public policy. Supreme Court granted the Employer's petition, vacated the award and remitted the matter for the imposition of a new penalty before a new arbitrator. Respondent appealed the court's ruling.

The Appellate Division said that the core issue presented is whether the arbitrator's award violated established public policy considerations prohibiting sexual harassment in the workplace, noting that, Supreme Court recognized, "that there is a strong public policy under both state and federal law that prohibits sexual misconduct in the workplace."

Noting that a court may vacate an arbitrator's award only on grounds stated in CPLR §7511(b), which include an instance where an arbitrator "exceed[s] his [or her] power" by rendering an award that violates a strong public policy, the Appellate Division observed that this limited public policy exception pertains "only when 'public policy considerations, embedded in statute or decisional law, prohibit, in an absolute sense, certain relief being granted by an arbitrator' [and] the courts must be able to examine the award on its face without engaging in extended fact-finding, or legal analysis, and conclude that public policy precludes its enforcement." This inquiry necessitates that courts gauge the penalty against the sustained charges.

The arbitrator sustained charges that alleged the Respondent had sexually harassed a female coworker. Indeed, the coworker's complaint with respect to the last incident suffered as the result of Respondent's alleged sexual harassment prompted an investigation and the filing of the instant disciplinary charges on the Respondent by the Employer. In addition, the coworker also filed criminal charges against Respondent, resulting in Respondent's plea of guilty to harassment in the second degree.

Conceding that the findings of the arbitrator are not challenged on this appeal, only the penalty imposed, the Appellate Division noted that under relevant provisions of the CBA, the arbitrator's decision:

1. As to the penalty to be imposed "shall be final and binding upon the parties"; and

2. The arbitrator is authorized to "take any ... appropriate action warranted under the circumstances including ... ordering reinstatement and back pay for all or part of any period of suspension without pay." 

The Employer, however, contended that the arbitrator's reinstatement of Respondent without conditions violates the public policy against sexual harassment.

Citing Newsday Inc. v Long Island Typographical Union No. 915, CWA, AFL-CIO, 915 F2d at 844-845, the Appellate Division noted that the United States Court of Appeals, Second Circuit, held that an arbitral award was properly vacated under the public policy exception where an arbitrator reinstated a terminated employee who had engaged in multiple acts of sexual harassment. 

Although the employee in Newsday had previously been disciplined for such conduct and warned, as here, that similar future conduct would warrant immediate discharge, the Appellate Division noted that Respondent did not have a disciplinary history. The Appellate Division, observed that unlike the employee in Newsday Respondent does not have a "disciplinary history", ... [but] ... "we have a series of four separate, escalating and outrageous sexual harassment incidents" by the Respondent.

This, said the Appellate Division, is "particularly troublesome" considering that Respondent had engaged in annual sexual harassment training since 2013 and, when confronted by his supervisors after two recent incidents of sexual harassment, "promised not to re-offend." In the words of the court, "The events that followed were even more egregious and rise to the level of criminal conduct, as memorialized in [Respondent's] guilty plea to the harassment charge."

Given the "extremely inappropriate nature" of Respondent's conduct, the Appellate Division concluded that the arbitrator's decision violated public policy, that the award failed to account for the rights of other employees to a non-hostile work environment and that it conflicted with the Employer's obligation to eliminate sexual harassment in the workplace. 

Finally, opined the court, "The fact that the victimized coworker no longer worked in the office is hardly a mitigating factor" nor is the penalty imposed on Respondent by the arbitrator "consistent with the arbitrator's 'significant concern' that [Respondent] failed to acknowledge his own wrongdoing."

Concluding that Supreme Court properly vacated the award as violative of the public policy prohibiting sexual harassment, the Appellate Division also ruled that Supreme Court was authorized to remit the matter to a different arbitrator for the imposition of a new penalty.

Click HERE to access the Appellate Division's decision. 

 

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