The Employer [Agency] suspended Petitioner [Employee] from his position without pay and charged him with three disciplinary charges alleging misconduct (Charge 1); sexual harassment in violation of the civilian manual and respondent's sexual harassment policy (Charge 2); and sexual harassment in violation of the state employee handbook (Charge 3). Employee grieved the charges and, after a hearing before an arbitrator, Employee was found guilty of charge 1 but Employee was found not guilty as to charges 2 and 3.
With respect to Charge 1, the arbitrator imposed a penalty of a six-month suspension without pay and, because Employee had already been suspended without pay in excess of "one month", the arbitrator ordered that Employee be reinstated to his position with back pay.
Employee filed a CPLR §7510 petition seeking to confirm the arbitration award after Agency failed to reinstate him to the position. In response to Employee's petition, Agency sought to vacate the arbitration award with respect to Charges 2 and 3 and to impose a penalty of termination.
Supreme Court confirmed the award with respect to Charge 1 and vacated the award with respect to Charges 2 and 3 as irrational and against public policy. Supreme Court then found Employee guilty of Charges 2 and 3 and remitted the matter to a different arbitrator for the imposition of a new penalty. Employee appealed the Supreme Court's decision.
The Appellate Division observed:
1. "Judicial review of arbitral awards is extremely limited and, thus, arbitration awards may only be vacated in limited circumstances, including where the 'arbitrator . . . exceeded his [or her] power'"; and
2. "[A]rbitrators exceed their power within the meaning of the CPLR only when they issue an award that violates a strong public policy, is irrational or clearly exceeds a specifically enumerated limitation on the arbitrator's power".
The Appellate Division opined that "An arbitrator that 'imposes requirements not supported by any reasonable construction of the [contract]' has, 'in effect, made a new contract for the parties' rendering the award subject to vacatur as irrational."
Here, said the Appellate Division, when evaluating Charges 2 and 3, "the arbitrator was required to consider the definition of sexual harassment as provided in the civilian manual and in the employee handbook." In making the ultimate determination as to Counts 2 and 3, the Appellate Division said the arbitrator "disregarded the definition of sexual harassment as contained in the manual and the handbook and supplied additional requirements not contained in either".
Noting that courts can neither "substitute judicial opinion for the arbitrator's decision" nor "rule on either the merits of the underlying allegations or impose a remedy [that it] feel is appropriate", the Appellate Division opined that "we must reverse those aspects of Supreme Court's order that did both".
Citing CPLR §7511 [d], the Appellate Division vacated "the portions of the award finding [Employee] not guilty of sexual harassment under [Charges] 2 and 3 and remit the matter to a new arbitrator for a new determination as to those charges and the imposition of an appropriate penalty".
Click HERE to access the Appellate Divisions decision posted on the Internet.
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