You are here: / Arbitration
, , ,

ARBITRATOR, NOT THE COURTS, MUST FIRST DETERMINE WHETHER THE MATTER IS ARBITRABLE, CITY HAD ISSUED NEW PROTOCOLS FOR FIRST RESPONDERS, THE UNION FILED A GRIEVANCE ARGUING THE NEW PROTOCOLS MUST BE THE SUBJECT OF ARBITRATION, AN ARBITRATOR MUST DECIDE WHETHER THE ISSUE IS COVERED BY THE COLLECTIVE BARGAINING AGREEMENT (SECOND DEPT).

The Second Department, reversing Supreme Court, held that whether the public sector employment matter was arbitrable under the terms of the collective bargaining agreement (CBA) must first be determined by the arbitrator, not the courts. The city had issued new protocols for first responders in the EMS program concerning active shooters, animal bites, suspicious packages, medical emergencies associated with criminal activity, etc. The union brought a grievance arguing that their members were not adequately trained for the new protocols and the issues should be the subject of arbitration:

“… [A] dispute between a public sector employer and an employee is only arbitrable if it satisfies a two-prong test” … . ” Initially, the court must determine whether there is any statutory, constitutional, or public policy prohibition against arbitrating the grievance'” … . ” If there is no prohibition against arbitrating, the court must examine the parties’ collective bargaining agreement and determine if they in fact agreed to arbitrate the particular dispute'” … .

When deciding whether a dispute is arbitrable, “the court shall not consider whether the claim with respect to which arbitration is sought is tenable, or otherwise pass upon the merits of the dispute” (CPLR 7501). “Even an apparent weakness of the claimed grievance is not a factor in the court’s threshold determination. It is the arbitrator who weighs the merits of the claim” … .

Here, it is undisputed that there is no statutory, constitutional, or public policy prohibition to arbitration of the grievance. Therefore, the only issue is whether the parties in fact agreed to arbitrate the dispute. Where, as here, the relevant arbitration provision of the CBA is broad, if the matter in dispute bears a reasonable relationship to some general subject matter of the CBA, it will be for the arbitrator and not the courts to decide whether the disputed matter falls within the CBA … .

In this case, Local 628’s grievance alleged that the City violated Article 33.1 of the CBA, which mandates that the EMS program be kept at the highest level of professional standards based upon the standards in place at the time of the agreement, by issuing General Order 4-15, which increased the call protocols and subjected its members to calls for which they are not trained and lack necessary equipment. Therefore, the grievance is reasonably related to at least one provision in the CBA, and the Supreme Court should have denied the petition to permanently stay arbitration. Matter of City of Yonkers v Yonkers Fire Fighters, Local 628, IAFF, AFL-CIO, 2018 NY Slip Op 08294, Second Dept 12-5-18

ARBITRATION (ARBITRATOR, NOT THE COURTS, MUST FIRST DETERMINE WHETHER THE MATTER IS ARBITRABLE, CITY HAD ISSUED NEW PROTOCOLS FOR FIRST RESPONDERS, THE UNION FILED A GRIEVANCE ARGUING THE NEW PROTOCOLS MUST BE THE SUBJECT OF ARBITRATION, AN ARBITRATOR MUST DECIDE WHETHER THE ISSUE IS COVERED BY THE COLLECTIVE BARGAINING AGREEMENT (SECOND DEPT))/EMPLOYMENT LAW (ARBITRATOR, NOT THE COURTS, MUST FIRST DETERMINE WHETHER THE MATTER IS ARBITRABLE, CITY HAD ISSUED NEW PROTOCOLS FOR FIRST RESPONDERS, THE UNION FILED A GRIEVANCE ARGUING THE NEW PROTOCOLS MUST BE THE SUBJECT OF ARBITRATION, AN ARBITRATOR MUST DECIDE WHETHER THE ISSUE IS COVERED BY THE COLLECTIVE BARGAINING AGREEMENT (SECOND DEPT))/CONTRACT LAW (COLLECTIVE BARGAINING AGREEMENT, ARBITRATOR, NOT THE COURTS, MUST FIRST DETERMINE WHETHER THE MATTER IS ARBITRABLE, CITY HAD ISSUED NEW PROTOCOLS FOR FIRST RESPONDERS, THE UNION FILED A GRIEVANCE ARGUING THE NEW PROTOCOLS MUST BE THE SUBJECT OF ARBITRATION, AN ARBITRATOR MUST DECIDE WHETHER THE ISSUE IS COVERED BY THE COLLECTIVE BARGAINING AGREEMENT (SECOND DEPT))/MUNICIPAL LAW (EMPLOYMENT LAW, ARBITRATOR, NOT THE COURTS, MUST FIRST DETERMINE WHETHER THE MATTER IS ARBITRABLE, CITY HAD ISSUED NEW PROTOCOLS FOR FIRST RESPONDERS, THE UNION FILED A GRIEVANCE ARGUING THE NEW PROTOCOLS MUST BE THE SUBJECT OF ARBITRATION, AN ARBITRATOR MUST DECIDE WHETHER THE ISSUE IS COVERED BY THE COLLECTIVE BARGAINING AGREEMENT (SECOND DEPT))/COLLECTIVE BARGAINING AGREEMENT (MUNICIPAL LAW, ARBITRATOR, NOT THE COURTS, MUST FIRST DETERMINE WHETHER THE MATTER IS ARBITRABLE, CITY HAD ISSUED NEW PROTOCOLS FOR FIRST RESPONDERS, THE UNION FILED A GRIEVANCE ARGUING THE NEW PROTOCOLS MUST BE THE SUBJECT OF ARBITRATION, AN ARBITRATOR MUST DECIDE WHETHER THE ISSUE IS COVERED BY THE COLLECTIVE BARGAINING AGREEMENT (SECOND DEPT))

, ,

COLLATERAL ESTOPPEL APPLIED TO THE OFFICE FOR PEOPLE WITH DEVELOPMENTAL DISABILITIES’ (OPWDD’S) ARBITRATION PROCEEDINGS WHICH FOUND PETITIONER WAS NOT GUILTY OF SUPPLYING MARIJUANA TO A RESIDENT OF A GROUP HOME FOR PERSONS WITH DEVELOPMENTAL DISABILITIES, THE SUBSEQUENT PROCEEDINGS BY THE JUSTICE CENTER FOR THE PROTECTION OF PEOPLE WITH SPECIAL NEEDS WERE BOUND BY THE FINDINGS OF THE OPWDD ARBITRATION (THIRD DEPT).

The Third Department, in a full-fledged opinion by Justice Garry, determined that the arbitration proceeding conducted by Office for People with Developmental Disabilities (OPWDD) had a collateral estoppel effect upon subsequent proceedings concerning the same matter conducted by the Justice Center for the Protection of People with Special Needs. Petitioner was accused of providing marijuana to a resident of a group home for persons with developmental disabilities. The OPWDD arbitration concluded petitioner was not guilty. However the Justice Center essentially sustained the charges. The central question was whether the OPWDD and the Justice Center were in privity, such that the Justice Center must accept the outcome of the OPWDD arbitration:

Collateral estoppel applies to arbitration proceedings, and when the doctrine’s requirements are satisfied, “[an] arbitrator’s factual findings must be accorded collateral estoppel effect” … .

…[T]the Justice Center shared interests with OPWDD in the disciplinary proceeding stemming from its fundamental statutory obligation to “protect[] . . . vulnerable persons who reside in or receive services from [state-operated] facilities” and “assur[e], on behalf of the state, that vulnerable persons are afforded care that is of a uniformly high standard” … . The Justice Center directly served these purposes by participating as counsel in the disciplinary proceeding conducted by OPWDD pursuant to its governing regulations and the pertinent collective bargaining agreement to determine whether petitioner should be terminated from her employment working with vulnerable persons… . …

… The Justice Center is required by statute to develop the code of conduct that governs OPWDD employees such as petitioner who regularly work with vulnerable persons in facilities like the group home at issue here … . …

… [T]he OPWDD form that was used to report the incident … included a section indicating that the Justice Center had been notified and providing the date, time and identification number of the notification … . The Justice Center’s subsequent investigation of the incident was carried out by an investigator who testified that he was employed by OPWDD. Matter of Anonymous v New York State Justice Ctr. for The Protection of People With Special Needs, 2018 NY Slip Op 07996, Third Dept 11-21-18

SOCIAL SERVICES LAW (COLLATERAL ESTOPPEL APPLIED TO OFFICE FOR PEOPLE WITH DEVELOPMENTAL DISABILITIES’ (OPWDD’S) ARBITRATION PROCEEDINGS WHICH FOUND PETITIONER WAS NOT GUILTY OF SUPPLYING MARIJUANA TO A RESIDENT OF A GROUP HOME FOR PERSONS WITH DEVELOPMENTAL DISABILITIES, THE SUBSEQUENT PROCEEDINGS BY THE JUSTICE CENTER FOR THE PROTECTION OF PEOPLE WITH SPECIAL NEEDS WERE BOUND BY THE FINDINGS OF THE OPWDD ARBITRATION (THIRD DEPT))/ARBITRATION (COLLATERAL ESTOPPEL APPLIED TO OFFICE FOR PEOPLE WITH DEVELOPMENTAL DISABILITIES’ (OPWDD’S) ARBITRATION PROCEEDINGS WHICH FOUND PETITIONER WAS NOT GUILTY OF SUPPLYING MARIJUANA TO A RESIDENT OF A GROUP HOME FOR PERSONS WITH DEVELOPMENTAL DISABILITIES, THE SUBSEQUENT PROCEEDINGS BY THE JUSTICE CENTER FOR THE PROTECTION OF PEOPLE WITH SPECIAL NEEDS WERE BOUND BY THE FINDINGS OF THE OPWDD ARBITRATION (THIRD DEPT))/COLLATERAL ESTOPPEL (ARBITRATION, COLLATERAL ESTOPPEL APPLIED TO OFFICE FOR PEOPLE WITH DEVELOPMENTAL DISABILITIES’ (OPWDD’S) ARBITRATION PROCEEDINGS WHICH FOUND PETITIONER WAS NOT GUILTY OF SUPPLYING MARIJUANA TO A RESIDENT OF A GROUP HOME FOR PERSONS WITH DEVELOPMENTAL DISABILITIES, THE SUBSEQUENT PROCEEDINGS BY THE JUSTICE CENTER FOR THE PROTECTION OF PEOPLE WITH SPECIAL NEEDS WERE BOUND BY THE FINDINGS OF THE OPWDD ARBITRATION (THIRD DEPT))/CIVIL PROCEDURE (COLLATERAL ESTOPPEL, ARBITRATION, COLLATERAL ESTOPPEL APPLIED TO OFFICE FOR PEOPLE WITH DEVELOPMENTAL DISABILITIES’ (OPWDD’S) ARBITRATION PROCEEDINGS WHICH FOUND PETITIONER WAS NOT GUILTY OF SUPPLYING MARIJUANA TO A RESIDENT OF A GROUP HOME FOR PERSONS WITH DEVELOPMENTAL DISABILITIES, THE SUBSEQUENT PROCEEDINGS BY THE JUSTICE CENTER FOR THE PROTECTION OF PEOPLE WITH SPECIAL NEEDS WERE BOUND BY THE FINDINGS OF THE OPWDD ARBITRATION (THIRD DEPT))

,

SIGNATORY TO AGREEMENT WITH AN ARBITRATION CLAUSE CANNOT AVOID ARBITRATION SIMPLY BECAUSE PARTIES ENTWINED IN THE PROCEEDINGS ARE NOT SIGNATORIES (SECOND DEPT).

The Second Department determined that a signatory to an agreement with an arbitration clause could not avoid arbitration because other parties entwined in the matter were not signatories:

… Supreme Court should have denied that branch of Garnick’s motion which sought a permanent stay of arbitration of the claims against him by Teitelbaum and Coluccio, derivatively on behalf of Axcess I, LLC, and Brooklyn Axcess, LLC, respectively. Axcess I, LLC, and Brooklyn Axcess, LLC, are not signatories to the Axcess, Inc., shareholders agreement that contains the arbitration clause. Nevertheless, Garnick is estopped from avoiding arbitration with them based on the relatedness between Axcess, Inc., and its subsidiaries, Axcess I, LLC, and Brooklyn Axcess, LLC, and the agreements and controversies at issue, which are intertwined with the Axcess, Inc., shareholders agreement containing the arbitration clause, to which Garnick is a signatory. Matter of DeNobile v Panetta, 2018 NY Slip Op 07722, Second Dept 11-14-18

ARBITRATION (CONTRACT LAW, SIGNATORY TO AGREEMENT WITH AN ARBITRATION CLAUSE CANNOT AVOID ARBITRATION SIMPLY BECAUSE PARTIES ENTWINED IN THE PROCEEDINGS ARE NOT SIGNATORIES (SECOND DEPT))/CONTRACT LAW (ARBITRATION, SIGNATORY TO AGREEMENT WITH AN ARBITRATION CLAUSE CANNOT AVOID ARBITRATION SIMPLY BECAUSE PARTIES ENTWINED IN THE PROCEEDINGS ARE NOT SIGNATORIES (SECOND DEPT))

, ,

ARBITRATION AWARD SHOULD NOT HAVE BEEN VACATED, LIMITED COURT-REVIEW POWERS EXPLAINED (FIRST DEPT).

The First Department, reversing Supreme Court, determined the arbitrator’s award should have been confirmed. The dispute concerned a broker’s fee provision in a lease. The arbitrator reasoned that the lease provision did not control because at the time the tenants bought the property the lease had expired and tenancy was month to month. The First Department explained the extremely limited court-review powers re: arbitration awards:

CPLR 7511 provides just four grounds for vacating an arbitration award, including that the arbitrator “exceeded his power” (CPLR 7511[b][1][iii]), which “occurs only where the arbitrator’s award violates a strong public policy, is irrational or clearly exceeds a specifically enumerated limitation on the arbitrator’s power”… . Mere errors of fact or law are insufficient to vacate an arbitral award … . “[C]ourts are obligated to give deference to the decision of the arbitrator, … even if the arbitrator misapplied the substantive law in the area of the contract” … .

Here, the arbitrator’s conclusion that a sales commission was not due under the precise terms of the Agreement because the lease was not extended is neither wholly irrational nor contrary to any strong public policy … . Matter of NRT N.Y. LLC v Spell, 2018 NY Slip Op 07664, First Dept 11-13-18

ARBITRATION (ARBITRATION AWARD SHOULD NOT HAVE BEEN VACATED, LIMITED COURT-REVIEW POWERS EXPLAINED (FIRST DEPT))/CIVIL PROCEDURE (ARBITRATION AWARD SHOULD NOT HAVE BEEN VACATED, LIMITED COURT-REVIEW POWERS EXPLAINED (FIRST DEPT))/CONTRACT LAW (ARBITRATION AWARD SHOULD NOT HAVE BEEN VACATED, LIMITED COURT-REVIEW POWERS EXPLAINED (FIRST DEPT))

, ,

THE ARBITRATOR-PANEL DID NOT HAVE THE AUTHORITY TO RECONSIDER A PARTIAL FINAL AWARD IN THIS DISPUTE BETWEEN AN INSURER AND THE INSURED, THE PANEL INITIALLY FOUND THAT A $10 MILLION SETTLEMENT PAID BY THE INSURED WAS NOT A COVERED LOSS, BUT SUBSEQUENTLY REVERSED ITSELF (FIRST DEPT).

The First Department, in a full-fledged opinion by Justice Kern, over a dissenting opinion, determined that the arbitrator-panel (JAMS) did not have the power to reconsider its initial finding (called a partial final award or PFA) that the $10 million settlement paid by Allied was not a “loss” within the meaning of the insurance policy issued to Allied by AISLIC. The parties had agreed to first decide whether the settlement constituted a “loss” and then determine the applicable costs stemming from the insured’s defense of the claim against it.  The First Department held that the arbitrator-panel did not have the authority to reconsider the initial PFA and reverse itself (finding that the settlement did actually constitute a “loss”) in the course of considering the defense and indemnification issues:

Here, when the panel reconsidered the PFA, it exceeded its authority based on the common law doctrine of functus officio. The doctrine of functus officio provides that absent an agreement to the contrary, after an arbitrator renders a final award, the arbitrator may not entertain an application to change the award, “except … to correct a deficiency of form or a miscalculation of figures or to eliminate matter not submitted”(…CPLR 7509; CPLR 7511[c]). “In order to be final,’ an arbitration award must be intended by the arbitrators to be their complete determination of all claims submitted to them” … . “Generally, in order for a claim to be completely determined, the arbitrators must have decided not only the issue of liability of a party on the claim, but also the issue of damages” … .

However, “the submission by the parties determines the scope of the arbitrators’ authority” … . Thus, “if the parties agree that the [arbitration] panel is to make a final decision as to part of the dispute, the arbitrators have the authority and responsibility to do so . . . [and] once [the] arbitrators have finally decided the submitted issues, they are, in common-law parlance, functus officio,’ meaning that their authority over those questions is ended” … . American Intl. Specialty Lines Ins. Co. v Allied Capital Corp., 2018 NY Slip Op 07194, First Dept 10-25-18

ARBITRATION (THE ARBITRATOR-PANEL DID NOT HAVE THE AUTHORITY TO RECONSIDER A PARTIAL FINAL AWARD IN THIS DISPUTE BETWEEN AN INSURER AND THE INSURED, THE PANEL INITIALLY FOUND THAT A $10 MILLION SETTLEMENT PAID BY THE INSURED WAS NOT A COVERED LOSS, BUT SUBSEQUENTLY REVERSED ITSELF (FIRST DEPT))/INSURANCE LAW (ARBITRATION, THE ARBITRATOR-PANEL DID NOT HAVE THE AUTHORITY TO RECONSIDER A PARTIAL FINAL AWARD IN THIS DISPUTE BETWEEN AN INSURER AND THE INSURED, THE PANEL INITIALLY FOUND THAT A $10 MILLION SETTLEMENT PAID BY THE INSURED WAS NOT A COVERED LOSS, BUT SUBSEQUENTLY REVERSED ITSELF (FIRST DEPT))/CIVIL PROCEDURE (ARBITRATION, THE ARBITRATOR-PANEL DID NOT HAVE THE AUTHORITY TO RECONSIDER A PARTIAL FINAL AWARD IN THIS DISPUTE BETWEEN AN INSURER AND THE INSURED, THE PANEL INITIALLY FOUND THAT A $10 MILLION SETTLEMENT PAID BY THE INSURED WAS NOT A COVERED LOSS, BUT SUBSEQUENTLY REVERSED ITSELF (FIRST DEPT))/FUNCTUS OFFICIO (ARBITRATION, THE ARBITRATOR-PANEL DID NOT HAVE THE AUTHORITY TO RECONSIDER A PARTIAL FINAL AWARD IN THIS DISPUTE BETWEEN AN INSURER AND THE INSURED, THE PANEL INITIALLY FOUND THAT A $10 MILLION SETTLEMENT PAID BY THE INSURED WAS NOT A COVERED LOSS, BUT SUBSEQUENTLY REVERSED ITSELF (FIRST DEPT))

, , ,

IN THIS CLASS ACTION AGAINST NATIONAL GRID AND LONG ISLAND POWER AUTHORITY (LIPA) STEMMING FROM THE LOSS OF POWER DURING HURRICANE SANDY, THE PUBLIC IS SUBJECT TO THE ARBITRATION CLAUSE IN THE CONTRACT BETWEEN NATIONAL GRID AND LIPA, FILING A PRE-ANSWER MOTION TO DISMISS AND APPEALING THE RULING ON IT DID NOT WAIVE ARBITRATION (SECOND DEPT).

The Second Department, reversing (modifying) Supreme Court, in a class action stemming from the loss of power during Hurricane Sandy, determined: (1) the public was a third-party beneficiary of a contract between National Grid and the Long Island Power Authority (LIPA); (2) the public was subject to the arbitration clause in the contract; and (3) filing a pre-answer motion dismiss did not act as a waiver of arbitration:

… [U]nder limited circumstances nonsignatories may be compelled to arbitrate” … . “Under the direct benefits theory of estoppel, a nonsignatory may be compelled to arbitrate where the nonsignatory knowingly exploits’ the benefits of an agreement containing an arbitration clause, and receives benefits flowing directly from the agreement” … . “The benefits must be direct, and the party seeking to compel arbitration must demonstrate that the party seeking to avoid arbitration relies on the terms of the agreement containing the arbitration provision in pursuing its claim” … . …

National Grid … demonstrated that the plaintiffs derived a direct benefit from the [contract] and that the plaintiffs are explicitly relying upon the terms of that agreement to support their claims against National Grid. Accordingly, under these circumstances, the plaintiffs should be compelled to arbitrate in accordance with the arbitration clause … . …

… [T]the service of a pre-answer motion to dismiss does not constitute waiver of the right to arbitrate, since “a defendant is entitled to have the sufficiency of a complaint tested before a duty to seek arbitration arises” … . Similarly, an appeal from the denial of a motion to dismiss does not result in waiver of the right to arbitrate … . Matter of Long Is. Power Auth. Hurricane Sandy Litig., 2018 NY Slip Op 07127, Second Dept 10-24-18

ARBITRATION (IN THIS CLASS ACTION AGAINST NATIONAL GRID AND LONG ISLAND POWER AUTHORITY (LIPA) STEMMING FROM THE LOSS OF POWER DURING HURRICANE SANDY, THE PUBLIC IS SUBJECT TO THE ARBITRATION CLAUSE IN THE CONTRACT BETWEEN NATIONAL GRID AND LIPA, FILING A PRE-ANSWER MOTION TO DISMISS AND APPEALING THE RULING ON IT DID NOT WAIVE ARBITRATION (SECOND DEPT))/CONTRACT LAW (ARBITRATION, IN THIS CLASS ACTION AGAINST NATIONAL GRID AND LONG ISLAND POWER AUTHORITY (LIPA) STEMMING FROM THE LOSS OF POWER DURING HURRICANE SANDY, THE PUBLIC IS SUBJECT TO THE ARBITRATION CLAUSE IN THE CONTRACT BETWEEN NATIONAL GRID AND LIPA, FILING A PRE-ANSWER MOTION TO DISMISS AND APPEALING THE RULING ON IT DID NOT WAIVE ARBITRATION (SECOND DEPT))/CIVIL PROCEDURE (ARBITRATION, IN THIS CLASS ACTION AGAINST NATIONAL GRID AND LONG ISLAND POWER AUTHORITY (LIPA) STEMMING FROM THE LOSS OF POWER DURING HURRICANE SANDY, THE PUBLIC IS SUBJECT TO THE ARBITRATION CLAUSE IN THE CONTRACT BETWEEN NATIONAL GRID AND LIPA, FILING A PRE-ANSWER MOTION TO DISMISS AND APPEALING THE RULING ON IT DID NOT WAIVE ARBITRATION (SECOND DEPT))/UTILITIES (IN THIS CLASS ACTION AGAINST NATIONAL GRID AND LONG ISLAND POWER AUTHORITY (LIPA) STEMMING FROM THE LOSS OF POWER DURING HURRICANE SANDY, THE PUBLIC IS SUBJECT TO THE ARBITRATION CLAUSE IN THE CONTRACT BETWEEN NATIONAL GRID AND LIPA, FILING A PRE-ANSWER MOTION TO DISMISS AND APPEALING THE RULING ON IT DID NOT WAIVE ARBITRATION (SECOND DEPT))

COURT’S LIMITED POWER OF REVIEW OF AN ARBITRATION AWARD EXPLAINED IN DEPTH, VACATION OF AWARD REVERSED (FIRST DEPT).

The First Department, reversing Supreme Court, in a full-fledged opinion by Justice Friedman, determined that Supreme Court did not have the power to order reconsideration of certain portions of the arbitration award (of over $100 million). The opinion is too detailed and comprehensive to fairly summarize here. The importance of the opinion is its detailed explanation of a court's limited power to review an arbitration award, even where the arbitrators got the law wrong:

The order vacating the award in part cannot be justified under the “emphatic federal policy in favor of arbitral dispute resolution” embodied in the FAA [Federal Arbitration Act],  a policy that “applies with special force in the field of international commerce” … . Under the FAA, even if an arbitral tribunal's legal and procedural rulings might reasonably be criticized on the merits, an award is not subject to vacatur for ordinary errors of the kind the court identified in this case, as opposed to manifest disregard of the law, a concept that … means “more than a simple error in law”… . “The potential for . . . mistakes [by the arbitrators] is the price for agreeing to arbitration” … , and, “however disappointing [an award] may be,” parties that have bargained for arbitration “must abide by it” ( ,,, [“Errors, mistakes, departures from strict legal rules, are all included in the arbitration risk”]). Accordingly, we reverse, grant the petition to confirm the award, and deny the cross motion to vacate it. Matter of Daesang Corp. v NutraSweet Co., 2018 NY Slip Op 06331, First Dept 9-27-18

ARBITRATION (COURT'S LIMITED POWER OF REVIEW OF AN ARBITRATION AWARD EXPLAINED IN DEPTH, VACATION OF AWARD REVERSED (FIRST DEPT))/FEDERAL ARBITRATION ACT (FAA) (COURT'S LIMITED POWER OF REVIEW OF AN ARBITRATION AWARD EXPLAINED IN DEPTH, VACATION OF AWARD REVERSED (FIRST DEPT))

, ,

THE ARBITRATOR’S DECISION TO OVERLOOK AN INSTANCE OF TARDINESS (ONE MINUTE LATE DUE TO A DISABLED TRAIN BLOCKING TRAFFIC) WHICH OTHERWISE WOULD REQUIRE THE GRIEVANT’S TERMINATION WAS NOT IRRATIONAL AND DID NOT EXCEED THE ARBITRATOR’S ENUMERATED POWERS (FOURTH DEPT).

The Fourth Department, reversing Supreme Court, determined that the arbitrator’s finding there was just cause to overlook the grievant’s one-minute tardiness for work. The collective bargaining agreement (CBA) included an eight-step disciplinary procedure for tardiness. Essentially eight instances of tardiness led to termination. Grievant had seven instances of tardiness at the time she was one minute late. She was delayed by a disabled train and she had called 10 minutes before her starting time to say she might be late because of the train:

We agree with respondent that the arbitrator’s award was not irrational. An award is irrational “if there is no proof whatever to justify” it… , and “[a]n arbitration award must be upheld when the arbitrator offer[s] even a barely colorable justification for the outcome reached’ ” … . Here, there is a colorable justification for the arbitrator’s determination. The attendance policy was a no-fault, straightforward progression of discipline that would be imposed for every incident of tardiness. Nevertheless, the CBA also had the “just cause” provision, and the arbitrator concluded that strict adherence to the attendance policy could be rejected in exceptional cases. …

We also agree with respondent that the arbitrator did not exceed a specifically enumerated limitation on his power. The CBA provided that the arbitrator “shall have no power or authority to add to, subtract from, modify, change, or alter any provisions of this Agreement.” Contrary to petitioner’s contention, the arbitrator did not impose any new requirement upon petitioner before it could discipline its employees and thus did not add to or alter the CBA. As explained above, the arbitrator determined, under the specific facts of this case, that the penalty of termination could not be upheld. The arbitrator did not adopt any new rules that petitioner must follow in future disciplinary cases, and we therefore reject petitioner’s slippery slope argument … . Matter of Lift Line, Inc. (Amalgamated Tr. Union, Local 282), 2018 NY Slip Op 05102, Fourth Dept 7-6-18

​ARBITRATION (THE ARBITRATOR’S DECISION TO OVERLOOK AN INSTANCE OF TARDINESS (ONE MINUTE LATE DUE TO A DISABLED TRAIN BLOCKING TRAFFIC) WHICH OTHERWISE WOULD REQUIRE THE GRIEVANT’S TERMINATION WAS NOT IRRATIONAL AND DID NOT EXCEED THE ARBITRATOR’S ENUMERATED POWERS (FOURTH DEPT))/EMPLOYMENT LAW (ARBITRATION, THE ARBITRATOR’S DECISION TO OVERLOOK AN INSTANCE OF TARDINESS (ONE MINUTE LATE DUE TO A DISABLED TRAIN BLOCKING TRAFFIC) WHICH OTHERWISE WOULD REQUIRE THE GRIEVANT’S TERMINATION WAS NOT IRRATIONAL AND DID NOT EXCEED THE ARBITRATOR’S ENUMERATED POWERS (FOURTH DEPT))/CONTRACT LAW (COLLECTIVE BARGAINING AGREEMENT, THE ARBITRATOR’S DECISION TO OVERLOOK AN INSTANCE OF TARDINESS (ONE MINUTE LATE DUE TO A DISABLED TRAIN BLOCKING TRAFFIC) WHICH OTHERWISE WOULD REQUIRE THE GRIEVANT’S TERMINATION WAS NOT IRRATIONAL AND DID NOT EXCEED THE ARBITRATOR’S ENUMERATED POWERS (FOURTH DEPT))/COLLECTIVE BARGAINING AGREEMENT  (THE ARBITRATOR’S DECISION TO OVERLOOK AN INSTANCE OF TARDINESS (ONE MINUTE LATE DUE TO A DISABLED TRAIN BLOCKING TRAFFIC) WHICH OTHERWISE WOULD REQUIRE THE GRIEVANT’S TERMINATION WAS NOT IRRATIONAL AND DID NOT EXCEED THE ARBITRATOR’S ENUMERATED POWERS (FOURTH DEPT))

, , ,

COURT EXCEEDED ITS AUTHORITY WHEN IT VACATED AN ARBITRATION AWARD, COURT DID NOT ACQUIRE PERSONAL JURISDICTION OVER A POLICE OFFICER SEEKING MUNICIPAL LAW 207-c BENEFITS BECAUSE THE OFFICER NEVER AUTHORIZED THE UNION ATTORNEY TO REPRESENT HER (FOURTH DEPT).

The Fourth Department, reversing Supreme Court, over a dissent, determined Supreme Court exceeded its authority when it vacated an arbitration award and the court did not acquire personal jurisdiction over the police officer (Lee) seeking Municipal Law 207-c benefits in another arbitration proceeding handled by a union lawyer:

Lee established that the court failed to acquire personal jurisdiction over her in the proceeding to confirm the arbitration award … because the City never properly served her … . Nor did the court acquire personal jurisdiction over Lee by the unauthorized appearance of the Union’s attorney “on behalf of Katherine Lee.” Contrary to the City’s contention, there is no evidence that Lee expressly or implicitly authorized the Union’s attorney to represent her at any stage of the proceedings. …

We further conclude that the court erred in sua sponte vacating its prior order and judgment, which confirmed the arbitration award … , and directing further arbitration. … A court has authority to “vacate its own judgment for sufficient reason and in the interests of substantial justice” … . That authority, however, is not unlimited… . “A court’s inherent power to exercise control over its judgments is not plenary, and should be resorted to only to relieve a party from judgments taken through [fraud,] mistake, inadvertence, surprise or excusable neglect” … .

In vacating the order and judgment, … the court “exceeded the narrow bounds within which courts are authorized to alter [arbitration] awards” … . None of the bases in CPLR 7511 (b) or (c) for vacating or modifying an arbitration award applies to the arbitrator’s failure to award the City a specific dollar amount for the value of benefits received by Lee, and the court had no power to disturb the award apart from the grounds set forth in those subdivisions  … . Matter of City of Syracuse (Lee), 2018 NY Slip Op 05077, Third Dept 7-6-18

​ARBITRATION (MUNICIPAL LAW, COURT EXCEEDED ITS AUTHORITY WHEN IT VACATED AN ARBITRATION AWARD, COURT DID NOT ACQUIRE PERSONAL JURISDICTION OVER A POLICE OFFICER SEEKING MUNICIPAL LAW 207-c BENEFITS BECAUSE THE OFFICER NEVER AUTHORIZED THE UNION ATTORNEY TO REPRESENT HER (FOURTH DEPT))/MUNICIPAL LAW (COURT EXCEEDED ITS AUTHORITY WHEN IT VACATED AN ARBITRATION AWARD, COURT DID NOT ACQUIRE PERSONAL JURISDICTION OVER A POLICE OFFICER SEEKING MUNICIPAL LAW 207-c BENEFITS BECAUSE THE OFFICER NEVER AUTHORIZED THE UNION ATTORNEY TO REPRESENT HER (FOURTH DEPT))/ATTORNEYS (MUNICIPAL LAW, COURT EXCEEDED ITS AUTHORITY WHEN IT VACATED AN ARBITRATION AWARD, COURT DID NOT ACQUIRE PERSONAL JURISDICTION OVER A POLICE OFFICER SEEKING MUNICIPAL LAW 207-c BENEFITS BECAUSE THE OFFICER NEVER AUTHORIZED THE UNION ATTORNEY TO REPRESENT HER (FOURTH DEPT))/CIVIL PROCEDURE (ARBITRATION,  COURT EXCEEDED ITS AUTHORITY WHEN IT VACATED AN ARBITRATION AWARD, COURT DID NOT ACQUIRE PERSONAL JURISDICTION OVER A POLICE OFFICER SEEKING MUNICIPAL LAW 207-c BENEFITS BECAUSE THE OFFICER NEVER AUTHORIZED THE UNION ATTORNEY TO REPRESENT HER (FOURTH DEPT))

, ,

ALTHOUGH INDIVIDUAL DEFENDANTS, OFFICERS OR EMPLOYEES OF DEFENDANT CORPORATION, DID NOT SIGN THE AGREEMENT IN THEIR INDIVIDUAL CAPACITIES, THEY ARE ENTITLED TO ENFORCE THE ARBITRATION PROVISION OF THE AGREEMENT (FIRST DEPT).

The First Department determined the individual defendants, officers or employees of the corporate defendant, are entitled to enforce the arbitration provision of the contract, even though they were not signatories:

The individual defendants, who were officers or employees of [defendant corporation] and did not sign the [agreement] in their individual capacities, are nevertheless entitled to enforce the arbitration provision, because any breach of the [agreement] would have to be the result of an action or inaction attributable to them. A rule allowing corporate officers and employees to enforce arbitration agreements entered into by the corporate principal “is necessary not only to prevent circumvention of arbitration agreements but also to effectuate the intent of the signatory parties to protect individuals acting on behalf of the principal in furtherance of the agreement” … . Further, even a nonsignatory may be estopped from avoiding arbitration where he knowingly accepted the benefits of an agreement with an arbitration clause … . Huntsman Intl. LLC v Albemarle Corp., 2018 NY Slip Op 04962, First Dept 7-3-18

​CONTRACT LAW (ARBITRATION, CORPORATION LAW, ALTHOUGH INDIVIDUAL DEFENDANTS, OFFICERS OR EMPLOYEES OF DEFENDANT CORPORATION, DID NOT SIGN THE AGREEMENT IN THEIR INDIVIDUAL CAPACITIES, THEY ARE ENTITLED TO ENFORCE THE ARBITRATION PROVISION OF THE AGREEMENT (FIRST DEPT))/ARBITRATION (CORPORATION LAW, CONTRACT LAW, ALTHOUGH INDIVIDUAL DEFENDANTS, OFFICERS OR EMPLOYEES OF DEFENDANT CORPORATION, DID NOT SIGN THE AGREEMENT IN THEIR INDIVIDUAL CAPACITIES, THEY ARE ENTITLED TO ENFORCE THE ARBITRATION PROVISION OF THE AGREEMENT (FIRST DEPT))/CORPORATION LAW (CONTRACT LAW, ARBITRATION, ALTHOUGH INDIVIDUAL DEFENDANTS, OFFICERS OR EMPLOYEES OF DEFENDANT CORPORATION, DID NOT SIGN THE AGREEMENT IN THEIR INDIVIDUAL CAPACITIES, THEY ARE ENTITLED TO ENFORCE THE ARBITRATION PROVISION OF THE AGREEMENT (FIRST DEPT))

Categories

Sign Up for the Mailing List to Be Notified When the Site Is Updated.

  • This field is for validation purposes and should be left unchanged.

Copyright © 2026 New York Appellate Digest, Inc.
Site by CurlyHost | Privacy Policy