Justifications for a court to vacate an arbitration award are limited

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.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2019/2019_05045.htm

Challenging the discontinuation of benefits being received pursuant General Municipal Law §207-c disability benefits following a work-related accident

A deputy sheriff [Deputy] was injured in a work-related motor vehicle accident and while on leave for his injuries, began receiving pay and benefits pursuant to General Municipal Law §207-c. Deputy was subsequently notified by the County that his benefits were being terminated because a form provided by one of the Deputy's physicians indicated that Deputy was able to return to a modified work position and was simultaneously offered a light-duty assignment by the Sheriff's Office. Deputy was also advised that his declining the light duty assignment "may affect continuation of his General Municipal Law §207-c benefits."

Deputy declined the light duty assignment offer, citing his injuries, and requested a hearing as provided for in the applicable collective bargaining agreement. The Hearing Officer issued a report finding, among other things, that Deputy's benefits had been improperly terminated and recommended that they be reinstated retroactively. The Sheriff [Respondent] rejected the Hearing Officer's findings and recommendation, without providing any explanation or findings in support of the determination.

Deputy filed an action pursuant to CPLR Article 78 seeking, among other things, a court order annulling the Sheriff's determination. As the petition raised a question of substantial evidence, Supreme Court transferred the matter to the Appellate Division for further consideration.

Noting that the Hearing Officer had made findings of fact and concluded that Respondent had committed multiple procedural errors in terminating Deputy's benefits and that the Sheriff, in rejecting the Hearing Officer's recommendation, had not provided any explanation or factual findings, the Appellate Division commented that "Administrative findings of fact must be made in such a manner that the parties may be assured that the decision is based on the evidence in the record, uninfluenced by extralegal considerations, so as to permit intelligent challenge by an aggrieved party and adequate judicial review."

Explaining that it could not conduct a meaningful judicial review in view of  the Sheriff's failure to make any findings or otherwise specify any basis for the apparent continued termination of Deputy's General Municipal Law §207-c benefits, the Appellate Division annulled the Sheriff's determination and returned the matter to the Sheriff "to address the procedural issues and develop appropriate factual findings."

Citing Simpson v Wolansky, 38 NY2d 391, the court opined that "the issue is not whether the Hearing Officer's report and recommendation is supported by substantial evidence; rather, the issue is whether the Sheriff's determination is supported by substantial evidence."

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2019/2019_04805.htm

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Some of the elements consider by the courts when an educator challenges his dismissal during his probationary period

The Appellate Division affirmed Supreme Court's denying a probationary employee's [Petitioner] CPLR Article 78 petition seeking a court order annulling a city school district's terminating Petitioner's* employment.

The court opined that:

1. It perceived no basis for finding that Petitioner's termination "was for a constitutionally impermissible purpose, violative of a statute, or done in bad faith," citing Matter of Mendez v New York City Dept. of Educ., 28 NY3d 993;

2.  Evidence in the record indicated that Petitioner received both "ineffective" and "developing" ratings on more than one occasion, supporting the conclusion that the determination to terminate him prior to the completion of his maximum  probationary period was not made in bad faith;

3. Petitioner was given timely notice of the possibility that his probationary employment would be terminated as mandated by Education Law §2573[1]*;

4. Petitioner was provided with support and any alleged deviations from internal procedures did not deprive him of a substantial right or undermine the fairness and integrity of the rating process followed by the school district; and

5. The record contained evidence of Petitioner's persistent and unresolved issues despite ongoing efforts by school administrators to help him improve his instructional methods.

* §2573[1] of the Education Law addresses the appointment and removal of probationary assistant, district or other superintendents,  teachers and other employees employed by a city school district having 125,000 or more inhabitants.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2019/2019_05090.htm

Courts impose stricter standards than required by CPLR Article 75 when considering a petition seeking to vacate an arbitration award promulgated pursuant to compulsory arbitration

The educator [Petitioner] in this CPLR Article 75 action appealed the Supreme Court's granting the appointing authority's motion to confirm an arbitration award terminating Petitioner's employment as a teacher, denied her petition seeking to vacate the award and dismissed the proceeding. Petitioner appealed but the Appellate Division unanimously affirmed the lower court's rulings.

Education Law §3020-a(5) provides that judicial review of a hearing officer's findings is limited to the grounds set forth in CPLR 7511(b), which provides that the court may vacate the award in the event it finds that the rights of the party challenging the award were prejudiced by:

(i) corruption, fraud or misconduct in procuring the award; or

(ii) partiality of an arbitrator appointed as a neutral, except  where  the award was by confession; or

(iii) an arbitrator, or agency or person making the award exceeded his power or so  imperfectly executed it that a final and definite award upon  the subject matter submitted was not made; or

(iv) failure to follow the CPLR Article 75 procedures, unless the party applying  to vacate the award continued with the arbitration with notice of the defect or defects and without objection.

Where, however, the parties have submitted to compulsory arbitration, as was here the case, judicial scrutiny is stricter in that the determination must be in accord with due process, supported by adequate evidence, be rational, and not arbitrary and capricious, the criteria required to be met in adjudicating final administrative disciplinary determinations in CPLR Article 78 proceedings.

The Appellate Division held that arbitrator's decision here being challenged was based on sufficient evidence, was rational, and was not arbitrary or capricious. Further, said the court, Petitioner did not dispute the absences and lateness noted in Specifications 1 through 6, which "the arbitrator properly found were excessive," and as to which the arbitrator noted that Petitioner failed to seek a medical accommodation until shortly before the charges were filed against her.

Further, noted the Appellate Division, Petitioner did not provide medical documentation supporting her claim that the absences and lateness were causally related to her medical condition.

Turning to the charges and specification alleging Petitioner had subjected a student to corporal punishment, the Appellate Division acknowledged the fact that the arbitrator had credited the student's testimony with respect to this element in the disciplinary action taken against Petitioner, and, citing Paul v NYC Department of Education, 146 AD3d 705, opined that a "hearing officer's determination of credibility is largely unreviewable."

Applying the Pell Doctrine set out in Matter of Pell v. Board of Educ. of Union Free School Dist. No. 1 of Towns of Scarsdale and Mamaroneck, 34 NY2d 22, the Appellate Division said that termination of Petitioner's employment does not shock the conscience given her repeated and prolonged attendance issues, which were the subject of two prior disciplinary proceedings, and her other substantial misconduct.

Citing Bolt v NYC Department of Education, 30 NY3d 1065, the court observed that although " .... reasonable minds might disagree over what the proper penalty should have been does not provide a basis for vacating the arbitral award or refashioning the penalty."

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2019/2019_05088.htm

Court remands appeal to the employer "only for the development of appropriate written factual findings," not for a new evidentiary disciplinary hearing

In this somewhat convoluted litigation, the county's personnel officer [Petitioner] was suspended by the County Board of Supervisors [Respondent] with pay and thereafter Respondent served Petitioner with charges seeking to remove her the position for cause pursuant to §24.1 of the Civil Service Law.  §24.1 essentially provides that the officer or body having the power of appointment of the members of a municipal civil service commission or a personnel officer may at any time remove any such member or personnel officer for cause, after a public hearing, and appoint his successor for the unexpired term.*

Ultimately Respondent, following a hearing, determined that cause for Petitioner's removal existed and terminate her. Petitioner then initiated a CPLR Article 78 proceeding seeking to annul Respondent's determination.

Supreme Court transferred the matter to the Appellate Division. The Appellate Division concluded that it could not conduct a meaningful review of Respondent's determination because Respondent "did not make any findings of fact, despite having heard testimony from multiple witnesses and considering the admitted documentary evidence." The Appellate Division then "withheld decision" and remitted the matter for Respondent to develop appropriate factual findings.

Contending that this action by the Appellate Division had "essentially nullified" Respondent's determination with respect to her termination from her position, Petitioner demanded that Respondent reinstate her to her former position with back pay and benefits. When Respondent refused, Petitioner commenced a second CPLR Article 78 proceeding seeking reinstatement and back pay.

Supreme Court treated this second petition as one in the nature of mandamus ** and dismissed the petition, observing that Petitioner had failed to establish that she had a clear legal right to the relief sought. Petitioner then appealed this ruling as well but the Appellate Division sustained the Supreme Court's ruling.

The court then explained that Petitioner's demanded that she be reinstated to her position of personnel officer was based on an incorrect interpretation of its prior decision as that decision did not remit the matter to Respondent for a new evidentiary hearing, but, rather, "only for the development of appropriate written factual findings." This ruling by the Appellate Division is posted on the Internet, and its URL is set out at Footnote [3] below.

Respondent subsequently issued findings of fact and conclusions of law in support of its determination to remove petitioner from her position. Petitioner commenced another proceeding challenging the Respondent's response to the court's directive to make findings of fact. The Appellate Division's ruling is this regard is also posted on the Internet, and its URL is set out at Footnote [4] below.

Picking up at the point where Respondent issued findings of fact and conclusions of law in support of its determination, finding that Petitioner withheld relevant information and material from the County's labor attorney and submitted them to the Appellate Division, addressing the status of the several Article 78 actions initiated by Petitioner, explained that "Because we withheld decision, the [initial] matter was still pending before this Court and it was unnecessary for any party to commence a new proceeding. Nevertheless, as Petitioner has commenced this proceeding and moved to withdraw her petition in the 2015 proceeding, we now address the merits of Respondent's determination.

The Appellate Division concluded that Respondent's determination to remove Petitioner from office is supported by substantial evidence. Citing Civil Service Law §24.1 provides that "[t]he officer or body having the power of appointment of . . . a personnel officer may at any time remove any such . . . personnel officer for cause, after a public hearing."

Citing Matter of Haug v State Univ. of N.Y. at Potsdam, 32 NY3d 1044, the court opined that when reviewing an administrative determination rendered after a hearing that is required by law, the court's standard is whether the determination "is, on the entire record, supported by substantial evidence" which is a "minimal standard ... demand[ing] only that a given inference is reasonable and plausible, not necessarily the most probable." Thus the court may not substitute its judgment for that of the panel nor weigh the evidence presented, beyond assuring that there is substantial evidence.

The record establishes that two former employees commenced proceedings against the Respondent alleging that they were improperly terminated. An issue raised in each of those proceedings was whether Petitioner was interim or acting director of the County health department or held herself out as such. When defending the County in those proceedings, the Respondent and Petitioner denied these allegations.

According to the attorney representing the Respondent, Petitioner had affirmed that she had not been appointed to the position either officially or unofficially, that she had never held herself out as such and that she was not in any way acting or interim director of the health department. The attorney also indicated that she expected Petitioner to provide any documents in the Respondent's possession that were relevant to any issues in the proceedings.

The Appellate Division noted that the record contains numerous documents indicating that Petitioner held herself out as interim director of the health department and that Petitioner admitted in her testimony that at times she had done so. Although Petitioner provided reasons for her actions and asserted that the attorney was aware of this information during the prior proceedings, Respondent specifically discounted Petitioner's credibility and truthfulness as a witness. Moreover, even if the attorney obtained these documents at some point from other sources, the record indicated that Petitioner had not provided them to the attorney.

Accordingly, said the court, substantial evidence supports Respondent's determination to remove Petitioner for cause because she withheld relevant information and materials from the attorney, which the attorney should have been able to review to determine whether they were necessary or important to the defense of matters being litigated matters.

The Appellate Division also reject Petitioner's argument that Respondent's factual findings are defective due to not being signed by all members of the hearing panel. No statute or regulation requires a unanimous vote of a hearing panel to remove a public official pursuant to Civil Service Law §24.1 nor that all of the participating panel members sign a determination said the court, concluding that the signatures of five of the eight original participating panel members constituted sufficient approval of the factual findings.

As to the penalty imposed, termination, the Appellate Division indicated that "A penalty must be upheld unless it is so disproportionate to the offense as to be shocking to one's sense of fairness, thus constituting an abuse of discretion as a matter of law," citing O'Connor v Cutting, 166 AD3d 1099. Further, said the court, the record reflects that the attorney relied primarily on Petitioner for correct information and evidence in defending the Respondent in the two proceedings, as she typically did in all labor proceedings, due to Petitioner's position as personnel officer. Notwithstanding the favorable decisions that the Respondent obtained in those two matters, the Appellate Division pointed out that Petitioner signed and submitted affidavits that contained false information, primarily because she failed to provide the attorney with relevant documents and accurate information.

Finally, the court pointed out that Civil Service Law §24 does not provide any disciplinary remedy other than removal of the incumbent from the position in contrast to Civil Service Law §75.3 which provides a range of penalties running from "a reprimand" to dismissal from the position. However, said the Appellate Division, even were imposing a lesser penalty possible, "it is not proper to substitute our judgment for that of [Respondent]" absent its finding that the  penalty of termination was shocking or disproportionate under the circumstances, i.e., the penalty imposed violated so-called "Pell Doctrine," Pell v Board of Educ. of Union Free School Dist. No. 1 of Towns of Scarsdale and Mamaroneck, 34 NY2d 222.

* §24.2, in pertinent part, provides that "A municipal civil service commissioner or personnel officer may be removed by the state civil service commission for incompetency, inefficiency, neglect of duty, misconduct or violation of the provisions of this chapter or of the rules established thereunder ...."

** The writ of mandamus is one of number of the ancient “common law” writs and is granted by a court to compel an official to perform "acts that officials are duty-bound to perform." Other writs include the writ of prohibition – a writ issued by a higher tribunal to a lower tribunal to "prohibit" the adjudication of a matter then pending before the lower tribunal on the grounds that the lower tribunal "lacked jurisdiction;" the writ of injunction - a judicial order preventing a public official from performing an act; the writ of "certiorari," compelling a lower court to send its record of a case to the higher tribunal for review by the higher tribunal; and the writ of “quo warranto” [by what authority], requiring the target of the writ to explain the authority for the action challenged. The Civil Practice Law and Rules sets out the modern equivalents of the surviving ancient writs.

The decisions are posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2019/2019_05031.htm 

and

http://www.nycourts.gov/reporter/3dseries/2019/2019_05035.htm