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THE ARGUMENT THAT THE ARBITRATOR’S AWARD, WHICH ALLOWED REINSTATEMENT OF AN EMPLOYEE AFTER A PERIOD OF SUSPENSION, VIOLATED PUBLIC POLICY WAS REJECTED; CRITERIA EXPLAINED (THIRD DEPT).

The Third Department, reversing Supreme Court, determined the arbitrator’s award in this employment-discipline case should not have been vacated. The court rejected the argument that the award, which penalized the employee (Williams) for misbehavior as a corrections officer but allowed her reinstatement, violated public policy. The decision is too complex to fairly summarize here. But it illustrates just how difficult it is to vacate an arbitrator’s award on public-policy grounds:

“A court may vacate an arbitrator’s award only on grounds stated in CPLR 7511 (b)” … . Among other circumstances, vacatur is permitted where an arbitrator directs an award that “violates a strong public policy” … . An arbitration award may only be vacated on public policy grounds “where a court can conclude, without engaging in any extended factfinding or legal analysis [(1)] that a law prohibits, in an absolute sense, the particular matters to be decided, or [(2)] that the award itself violates a well-defined constitutional, statutory or common law of this State” … . As there is no contention that the law prohibited the arbitrator from deciding Williams’ guilt and penalty under the CBA, [collective bargaining agreement] our inquiry focuses on whether “the final result creates an explicit conflict with other laws and their attendant policy concerns” … . Matter of Spence (New York State Dept. of Corr. & Community Supervision), 2025 NY Slip Op 04135, Third Dept 7-10-25

Practice Point: Consult this decision for an explanation of the criteria for vacating an arbitrator’s award on public policy grounds.

 

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A COURT’S POWER TO VACATE AN ARBITRATOR’S AWARD IS EXTREMELY LIMITED; AN ARBITRATOR’S INTERPRETATION OF A COLLECTIVE BARGAINING AGREEMENT CANNOT BE REVIEWED UNLESS IT IS “COMPLETELY IRRATIONAL;” HERE THE ARBITRATOR’S AWARD UPHOLDING THE SUSPENSION OF PETITIONER-DENTAL-HYGIENIST FOR HER FAILURE TO OBTAIN A COVID-19 VACCINE WAS CONFIRMED (FOURTH DEPT). ​

The Fourth Department, reversing Supreme Court, determined the arbitrator’s award in this COVID-19 vaccine-mandate case should not have been vacated. The arbitrator found that the petitioner-employee, a dental hygienist, was properly suspended without pay and issued a Notice of Discipline for failure to obtain a COVID-19 vaccine. A court’s power to vacate an arbitration award is extremely limited:

We agree with respondent that the court “erred in vacating the award on the ground that it was against public policy because petitioner[] failed to meet [her] heavy burden to establish that the award in this employer-employee dispute violated public policy” … . We further agree with respondent that the court “erred in vacating the award on the ground that it was irrational” … . ” ‘An award is irrational if there is no proof whatever to justify the award’ ” … . Where, however, “an arbitrator ‘offer[s] even a barely colorable justification for the outcome reached,’ the arbitration award must be upheld” … . Here, there is no dispute that respondent directed petitioner to fully receive the COVID-19 vaccine by a specific date, that it apprised her that her continued employment was contingent upon her compliance, and that petitioner refused to be vaccinated by the required date. It is also undisputed that petitioner was never granted a reasonable accommodation that excused her compliance with the vaccine mandate. Consequently, the court erred in concluding that the arbitrator’s award was irrational … . To the extent petitioner argues that the arbitrator erred in not considering the propriety of respondent’s denial of petitioner’s request for a reasonable accommodation based on a pre-existing health condition, we note that the arbitrator interpreted the CBA as precluding any review of that decision. Inasmuch as we conclude that “the arbitrator’s ‘interpretation of the [CBA] [is] not . . . completely irrational, [it] is beyond [our] review power’ ” … . Finally, we note that the court was not permitted to vacate the award merely because it believed vacatur would better serve the interest of justice … . Matter of Davis (State of New York Off. of Mental Health), 2025 NY Slip Op 03910, Fourth Dept 6-27-25

Practice Point: Consult thee decisions for an explanation of the limits on a court’s review of an arbitration award.

 

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PLAINTIFF’S DECEDENT WAS KILLED WHEN THROWN FROM A RENTED MOPED; THE RENTAL AGREEMENT INCLUDED AN ARBITRATION CLAUSE; THE NEGLIGENCE CAUSES OF ACTION ARE SUBJECT TO THE ARBITRATION CLAUSE; HOWEVER, THE WRONGFUL DEATH CAUSE OF ACTION IS NOT SUBJECT TO THE ARBITRATION CLAUSE; NEGLIGENCE AND WRONGFUL-DEATH CAUSES OF ACTION ARE DISTINCT AND ADDRESS DIFFERENT INJURIES; THE WINNING ISSUE WAS RAISED FOR THE FIRST TIME ON APPEAL (SECOND DEPT).

The Second Department, reversing Supreme Court, in a full-fledged opinion by Justice McCormack, determined the plaintiffs in this wrongful death action, who are the parents of plaintiffs’ decedent and the administrators of decedent’s estate, are not bound by the decedent’s agreement to arbitrate. The decedent rented an electric moped from defendant Ravel by downloading an app with an arbitration clause. Decedent was killed when he was thrown from the moped and struck by a car. All agreed that the negligence causes of action were subject to the arbitration clause. Plaintiffs successfully argued the wrongful death action is distinct from the negligence actions and is not subject to the arbitration clause. The winning argument was first raised on appeal. The court heard the appeal because it “present[ed] a pure question of law that appears on the face of the record and could not have been avoided if raised at the proper juncture” …:

Here, it is undisputed that the plaintiffs, individually, did not enter into an agreement with Revel to arbitrate. However, the plaintiffs are the administrators of the decedent’s estate, and the causes of action arise from the same incident that caused the decedent’s death. The issue, therefore, turns on the nature of wrongful death causes of action and whether they are derivative of negligence causes of action or independent of negligence causes of action. * * *

The law of this State is clear that a wrongful death cause of action is a separate and distinct cause of action to redress the injuries suffered by a decedent’s distributees as a result of the decedent’s death. “‘A cause of action to recover damages for wrongful death is a property right belonging solely to the distributees of the decedent and vests in them at the decedent’s death'” … . This is true even where no cause of action alleging negligence exists. * * * … [T]his Court [has] determined that a cause of action alleging wrongful death was not derivative of a negligence cause of action, but [is] an independent cause of action vested in the distributees. “… [T]he surviving personal injury action and the wrongful death cause of action … are different in many respects. The two causes of action exist in order to protect the rights of different classes of persons, and the measure of damages is entirely different” … . “Wrongful death actions are brought not to compensate the decedent or his [or her] estate for the pain and suffering attendant to the injury, but rather to recover, on behalf of decedent’s distributees, the pecuniary value of the decedent’s life” … . Further, the different causes of action accrue at different times. A negligence cause of action accrues at the time of the injury, while a wrongful death cause of action does not accrue until the decedent’s death, which can occur after the injury is sustained … . Marinos v Brahaj, 2025 NY Slip Op 03561, Second Dept 6-11-25

Practice Point: Negligence and wrongful death causes of action are distinct and address different injuries. Here an arbitration clause in a moped rental contract executed to by plaintiffs’ decedent was deemed to apply to the negligence causes of action stemming from the moped accident, but not to the related wrongful death cause of action.​

Practice Point: Consult this opinion for an example of when an issue raised for the first time on appeal will be considered by the appellate court.

 

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FAILURE TO COMPLY WITH THE EMPLOYER’S DIRECTIVE TO TAKE THE COVID-19 VACCINE JUSTIFIED THE TERMINATION OF PETITIONER’S EMPLOYMENT; THE ARBITRATOR’S RULING TO THAT EFFECT DID NOT VIOLATE PUBLIC POLICY AND WAS NOT IRRATIONAL (FOURTH DEPT).

The Fourth Department, reversing Supreme Court, affirmed the arbitrator’s determination petitioner was properly terminated because she refused the COVID-19 vaccine:

… [T]he court “erred in vacating the award on the ground that it was against public policy because petitioners failed to meet their heavy burden to establish that the award in this employer-employee dispute violated public policy” … . We further agree with respondents that the court “erred in vacating the award on the ground that it was irrational” … . ” ‘An award is irrational if there is no proof whatever to justify the award’ … . Where, however, “an arbitrator ‘offer[s] even a barely colorable justification for the outcome reached,’ the arbitration award must be upheld” … . Here, inasmuch as it is undisputed that [the employer] directed petitioner to receive the vaccine by a date certain, that it apprised her that her continued employment was dependent upon her compliance, and that petitioner refused to be vaccinated by the required date, the court erred in concluding that the arbitrator’s award was irrational … . Further, the court was not permitted to vacate the award merely because it believed vacatur would better serve the interest of justice … . Matter of Cooper (Roswell Park Comprehensive Cancer Ctr., 2025 NY Slip Op 02445, Fourth Dept 4-25-25

Practice Point: The arbitrator’s determination petitioner was properly terminated for refusing a COVID-19 vaccination did not violate public policy and was not irrational.

 

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PLAINTIFF INSURER DENIED FOUR CLAIMS FOR NO-FAULT INSURANCE BENEFITS ASSOCIATED WITH FOUR DISTINCT CHIROPRACTIC TREATMENTS PROVIDED BY DEFENDANT TO A WOMAN INJURED IN A TRAFFIC ACCIDENT; EACH OF THE FOUR CLAIMS WAS FOR AN AMOUNT BELOW $5000; AN ARBITRATOR AWARDED THE CLAIMED BENEFITS TO THE DEFENDANT; PLAINTIFF THEN SOUGHT DE NOVO REVIEW OF THE ARBITRAL AWARDS WHICH HAS A $5000 THRESHOLD; THE FOUR DISTINCT ARBITRAL AWARDS CANNOT BE COMBINED TO MEET THE $5000 THRESHOLD (SECOND DEPT). ​

The Second Department, reversing Supreme Court, in a full-fledged opinion by Justice Duffy, determined the complaint in this no-fault insurance-benefit action should have been dismissed for lack of subject matter jurisdiction:

The issue on appeal, an issue of first impression for this Court, is whether, under certain circumstances, separate and distinct arbitral awards can be treated by a court as, in effect, a single arbitral award under Insurance Law § 5106(c) and pursuant to 11 NYCRR 65-4.10(h)(1)(ii) for the purposes of determining whether the requisite $5,000 threshold establishing subject matter jurisdiction has been met to allow for a de novo review of claims for no-fault insurance benefits…. [W]e hold that the plain language of Insurance Law § 5106(c) and 11 NYCRR 65-4.10(h)(1) does not contemplate allowing separate and distinct arbitral awards to be treated as, in effect, a single arbitral award or to be combined by a court for the purposes of meeting the required monetary jurisdictional threshold under Insurance Law § 5106(c) and 11 NYCRR 65-4.10(h)(1)(ii). …

… [P]laintiff American Transit Insurance Company commenced this action pursuant to Insurance Law § 5106(c) and 11 NYCRR 65-4.10(h)(1)(ii) to seek de novo review of four separate arbitral awards issued by a master arbitrator (hereinafter the arbitral awards). The four arbitral awards were issued by the same master arbitrator, following separate arbitration proceedings upon the plaintiff’s denial of payment for medical services performed by the defendant for Nancy Bayona, an individual who alleged that she was injured as a result of a motor vehicle accident in February 2019 when she was riding as a passenger in a taxi insured by the plaintiff. The arbitration proceedings arose upon the plaintiff’s denial of each of four claims submitted to it by the defendant for a repeated course of chiropractic treatment of Bayona performed by the defendant between March 8 and September 4, 2019. After each of the four arbitration proceedings, the master arbitrator issued an arbitral award in favor of the defendant, respectively, as follows: $4,767.63 for chiropractic services performed in March 2019; $4,767.63 for chiropractic services performed in March 2019 and April 2019; $4,767.63 for chiropractic services performed in April 2019 and May 2019; and $3,178.42 for chiropractic services performed in August 2019. … [P]laintiff commenced this action seeking de novo review of the four arbitral awards. American Tr. Ins. Co. v Comfort Choice Chiropractic, P.C., 2025 NY Slip Op 01337, Second Dept 3-12-25

Practice Point: De novo review of an arbitral award of no-fault benefits has a threshold of $5000. Here there were four claims for no-fault benefits for four distinct chiropractic treatments provided to a woman injured in a traffic accident. Each of the four claims was for an amount below $5000. The Second Department held the $5000 threshold for de novo review could not be met by combining the four distinct arbitral awards.

 

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THE DEFENDANT HOTEL BOOKING SERVICE, AGODA, COULD NOT BE COMPELLED TO ARBITRATE IN PLAINTIFF’S SLIP AND FALL ACTION AGAINST THE HOTEL; AGODA’S TERMS OF USE LIMITED LIABILITY TO THE BOOKING SERVICES AND EXPRESSLY EXCLUDED LIABILITY FOR PERSONAL INJURY AT THE HOTEL (FIRST DEPT). ​

The First Department, reversing Supreme Court, determined the defendant hotel booking service, Agoda, could not be compelled to arbitrate in this slip and fall action against the hotel booked through Agoda. The terms of use confined Agoda’s potential liability to the booking services and expressly excluded liability for personal injury:

A “party cannot be compelled to submit to arbitration unless the agreement to arbitrate expressly and unequivocally encompasses the subject matter of the particular dispute” … . Where arbitration provisions do not clearly and unequivocally provide that questions about the scope of the arbitration provisions are for the arbitration panel to determine, the threshold question whether the dispute is encompassed within an agreement to arbitrate is for the courts (CPLR 7503[b] …).

The arbitration clause in the terms of use covers “all disputes or claims arising out of or relating to your relationship with Agoda.” The terms of use also define Agoda’s role as providing a platform for individuals to browse information about accommodations and make reservations at accommodations. Furthermore, the terms of use make clear that “Agoda does not in any way . . . own, manage, operate or control” the accommodations and that Agoda will not be liable in damages for any “(PERSONAL) INJURY . . ., OR OTHER DAMAGES, ATTRIBUTABLE TO THE ACCOMMODATION.” Because plaintiff’s claim is one to recover damages for a personal injury caused by the resort’s negligence, it does not arise from or relate to the relationship between plaintiff and Agoda, which was limited to plaintiff’s booking a reservation at the resort, and therefore is not arbitrable … .

As for Agoda’s motion to dismiss, the terms of use constitute documentary evidence under CPLR 3211(a)(1), and the limitation of liability clause in the terms of use definitively disposes of plaintiff’s claim to recover damages from Agoda for personal injury caused by the resort’s alleged negligence … . McWashington v Hyatt Corp., 2025 NY Slip Op 00050, First Dept 1-7-25

Practice Point: Here the hotel booking service’s terms of use expressly excluded liability for plaintiff’s personal injury at the hotel. Therefore the booking service could not be compelled to arbitrate in plaintiff’s slip and fall case.

 

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PLAINTIFF WAS INJURED IN A LYFT CAR WHICH HAD BEEN ORDERED BY HIS FRIEND THROUGH THE FRIEND’S ACCOUNT; BECAUSE PLAINTIFF HAD SCROLLED THROUGH AND AGREED TO LYFT’S TERMS OF SERVICE, WHETHER PLAINTIFF WAS BOUND BY THE ARBITRATION CLAUSE MUST BE DETERMINED BY THE ARBITRATOR (FIRST DEPT).

The First Department, reversing Supreme Court, determined plaintiff, who used another’s Lyft account to order transportation, and who was injured in an accident involving the Lyft car, was subject to an arbitration provision in the contract between Lyft and the account-holder. Whether the plaintiff was bound by the arbitration clause was deemed to be an issue to be decided by the arbitrator:

Arbitration must be compelled because plaintiff was a party to an arbitration agreement with Lyft that expressly delegated the threshold question of arbitrability to the arbitrator. It is undisputed that, prior to the subject accident, plaintiff scrolled through and agreed to Lyft’s Terms of Service (the TOS), which included an agreement to arbitrate. As part of the arbitration agreement, the parties agreed to delegate “disputes concerning the arbitrability of a Claim (including disputes about the scope, applicability, enforceability, revocability or validity of the Arbitration Agreement)” to the arbitrator. When the parties’ contract delegates the arbitrability question to an arbitrator, the courts must respect the parties’ decision “even if the arguments of the party seeking to arbitrate ‘appear[] to the court to be frivolous’ or even ‘wholly groundless'” … .

There is no dispute that if plaintiff had ordered the subject ride through his own Lyft account, then the instant claims would be subject to arbitration because plaintiff was party to a valid and enforceable arbitration agreement with a valid and enforceable delegation provision — even if there were a question as to the arbitration agreement’s scope … . We find that the question of whether the agreement to arbitrate encompassed claims stemming from plaintiff’s presence in a Lyft that he did not order is a question of arbitrability that must be decided by the arbitrator … . Samuel v Islam, 2024 NY Slip Op 06675, First Dept 12-31-24

Practice Point: If you scroll through and agree to the terms of service when a Lyft car is ordered though another’s account, and you are subsequently injured in an accident in the Lyft car, you are compelled to arbitrate the question whether you are subject to the arbitration clause just as the account-holder would be.

 

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BY CLICKING ON CONTRACT TERMS ON HER SMART PHONE, PLAINTIFF AGREED TO ARBITRATE HER PERSONAL INJURY CLAIM AGAINST UBER; PLAINTIFF ALLEGED INJURY AFTER AN UBER DRIVER LEFT HER OFF IN TRAFFIC (CT APP).

The Court of Appeals, in a full-fledged opinion by Judge Cannataro, over a two-judge dissent, determined that plaintiff, by clicking on notifications of contract terms from Uber on her smart phone, agreed to submit her personal injury action against Uber to arbitration. Plaintiff alleged the Uber driver left her off in traffic and she was injured as a result. The opinion is too detailed to fairly summarize here. The precise language of the notifications from Uber are laid out:

On this appeal, we apply centuries-old principles of contract law to a web-based “terms of use” update containing an arbitration agreement. The parties dispute the validity of that agreement and its applicability to this personal injury action, which plaintiff commenced two months before she indicated her assent to the updated terms of use by means of a series of clicks on her smartphone.

We conclude that the “clickwrap” process Uber used to solicit plaintiff’s assent resulted in the formation of an agreement to arbitrate. Moreover, a key term of that agreement expressly delegates to an arbitrator the exclusive authority to resolve all disputes as to the applicability and enforceability of the agreement. Because plaintiff has not established that the delegation provision is invalid, her challenges to the portions of the agreement that purportedly apply to pending legal claims were properly directed to the arbitrator. Wu v Uber Tech., Inc., 2024 NY Slip Op 05869, CtApp 11-25-24

Practice Point: Here plaintiff was notified by Uber of updated contract terms in a message sent to her smart phone. By “clicking” agreement to the terms on her phone’s screen, plaintiff agreed to arbitrate her personal injury action against Uber.

 

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THE CONTRACT PROVISIONS MANDATING ARBITRATION WERE PROPERLY ENFORCED BY SUPREME COURT (FIRST DEPT).

The First Department, in a full-fledged opinion by Justice Oing, affirming Supreme Court, determined the contract provisions compelling arbitration should be enforced in this complex dispute among the owners and operators of nursing homes in Arizona. The terms of the contracts and the history of the litigation are far too detailed to fairly summarize here. Matter of Fein v Langer, 2024 NY Slip Op 04906, First Dept 10-8-24

Practice Point: In this case, the proverb cited in the opinion—“be careful what you wish for”—-means the contract provisions compelling arbitration controlled and the court litigation which had been commenced was precluded.

 

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THE ARBITRATOR’S INTERPRETATION OF THE COLLECTIVE BARGAINING AGREEMENT WAS NOT IRRATIONAL; THE AWARD MUST BE CONFIRMED EVEN WHERE THE COURT DISAGREES WITH THE INTERPRETATION (FOURTH DEPT).

The Fourth Department, reversing Supreme Court, determined the arbitrator’s ruling that petitioner firefighters were entitled to paid emergency leave should have been confirmed. In recent weeks, the appellate courts across the state have been emphasizing the finality of an arbitrator’s award, even where the court might have decided the matter differently:

“[J]udicial review of arbitration awards is extremely limited” … . “The court must vacate an arbitration award where the arbitrator exceeds a limitation on his or her power as set forth in the CBA [collective bargaining agreement]” … . The court, however, lacks the authority to “examine the merits of an arbitration award and substitute its judgment for that of the arbitrator simply because it believes its interpretation would be the better one” … .

Here, the arbitrator merely interpreted and applied the provisions of the relevant CBA, as he had the authority to do … . We are powerless to set aside that interpretation even if we disagree with it … . Contrary to respondent’s urging, the arbitrator’s determination was not irrational; nothing in the CBA suggests that a request for emergency leave may not be made prior to the start of a tour of duty, and the arbitrator provided a justification for his determination … . Matter of Local 32, Intl. Assn. of Fire Fighters, A.F.L.-C.I.O.-C.L.C. (City of Utica), 2024 NY Slip Op 04878, Fourth Dept 10-4-24

Practice Point: The appellate courts are making it clear that an arbitrator’s award should not be tampered with by the courts as long as the arbitrator has not exceeded his or her powers.

 

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