Jan 7, 2026

The scope of the public policy exception to an arbitrator's power

A New York State Supreme Court granted the State of New York - Unified Court System's [UCS] petition seeking to permanently stay arbitration sought by UCS and denied the cross-motion of the Civil Service Employees Association [CSEA] to compel arbitration.  The Appellate Division unanimously reversed the  lower court's ruling "on the law", dismissed UCS's petition, granted CSEA's motion, and then directed the parties to proceed to arbitration.

CSEA had filed a grievance on behalf of a member [Grievant] in the collective bargaining represent by CSEA challenging USC's summarily removing the Grievant from his position of Principal Law Clerk after the Grievant had successfully completed the required probationary period. 

UCS told Grievant that he was "in the wrong job title, job grade, and salary", contending that a recent audit of its employee records revealed that Grievant was improperly in the title of the position, Principal Law Clerk, as his judicial assignment did not meet the appropriate criteria of a Principal Law Clerk to two "multi-bench judges" and this error would be corrected by "redesignating" the title of Grievant's position to Associate Court Attorney. 

USC's letter also indicated that although Grievant's designation as a Principal Law Clerk resulted in a payment of a salary greater than the salary due him by reason of his serving in the position of  Associate Court Attorney, UCS would not seek to recoup any salary overpayment but his future compensation would be "adjusted prospectively" to the lower salary payable to an Associate Court Attorney.

The Appellate Division held that Supreme Court erred when it permanently stayed CSEA's demand for arbitration of this matter "as public policy does not preclude arbitration of the narrow issue underlying CSEA's grievance": did UCS's actions  constituted a reclassification of Grievant's title from Principal Law Clerk to the title of Associate Court Attorney, resulting in a reduction of his salary grade, violate the parties' collective bargaining agreement.

The Appellate Division noted that the grievance did not challenge UCS's authority to classify, reclassify, allocate, or reallocate UCS positions as authorized by 22 NYCRR 25.5(a), opining that CSEA sought an interpretation of Articles 19 and 20 of the collective bargaining agreement then in force to determine whether UCS's actions "violated the parties' contractual rights and responsibilities". In the words of the Appellate Division, "[in] light of the narrow scope of the public policy exception to an arbitrator's power, the matter is arbitrable, especially because it concerns a public employment collective bargaining agreement".

Click HERE to access the Appellate Division's decision posted on the Internet.