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ARBITRATOR’S INTERIM DECISION RE PETITIONER’S SUSPENSION WITHOUT PAY WAS IMPROPER, AND THE ARBITRATOR’S DISMISSAL OF THE CHARGES VIOLATED PUBLIC POLICY, THIRD DEPT PROVIDED A COMPREHENSIVE DISCUSSION OF A COURT’S POWER TO REVIEW AN ARBITRATOR’S DECISION (THIRD DEPT).

The Third Department determined the arbitrator’s ruling in this employment matter violated public policy because the ruling, which dismissed the charges and imposed no penalty, acknowledged that petitioner had violated the Public Officers Law by sharing confidential information with her husband. Petitioner was employed by respondent Department of Corrections and Community Supervision (hereinafter DOCCS) … . Petitioner was suspended without pay for allegedly releasing confidential information to her husband, who had recently been released from prison on parole supervision in connection with his rape conviction. The decision too detailed to be fairly summarized here. It provides a comprehensive overview of the court’s role and powers in reviewing an arbitrator’s findings and is well worth reading carefully:

Section 33.5 (f) (4) of the CBA [collective bargaining agreement] prohibits arbitrators from adding new requirements to the provisions of the agreement. The arbitrator exceeded his power by adding a requirement to the CBA regarding what proof could be considered [in making an interim award] and by refusing to consider hearing evidence submitted by DOCCS to determine whether probable cause existed for petitioner’s suspension [without pay pending a hearing]. Therefore, the interim decision and award by the arbitrator was improper. * * *

… [T]he CBA could be read to require proof of every aspect of a particular charge before finding an employee guilty thereof, so we should not set aside the arbitrator’s conclusions on the ground that they are based on that interpretation … . DOCCS could have specified separate charges for each time petitioner accessed, and for each time she shared, confidential information. Instead, DOCCS proffered a single charge that petitioner accessed confidential information at least 14 times when she had no job-related reason to do so and shared that information with her husband at least eight times. Having found that DOCCS failed to establish that petitioner engaged in all of the conduct contained in the notice of discipline’s single charge, the arbitrator found her not guilty and imposed no penalty. As courts may not review an arbitrator’s findings of fact or law, even if the arbitrator made errors … , as long as the CBA was reasonably susceptible of the interpretation given to it by the arbitrator, Supreme Court erred in determining that the arbitrator exceeded his power. …

Although the arbitrator concluded that DOCCS failed to establish the charge as set forth in the notice of discipline, he factually determined that petitioner improperly accessed a confidential database 14 times, and at least one time she shared DOCCS’s confidential information with a parolee. These factual findings, which we must accept… , establish that petitioner violated Public Officers Law § 74 (3) (c). … [T]he relief granted in the arbitrator’s award — dismissal of the charges, with no penalty or repercussions for her misconduct, and reinstating her to the position in which she would continue to have access to confidential information — violated public policy, requiring vacatur of that award… . Matter of Virginia Livermore-johnson, 2017 NY Slip Op 08239, Third Dept 11-22-17

ARBITRATION (ARBITRATOR’S INTERIM DECISION RE PETITIONER’S SUSPENSION WITHOUT PAY WAS IMPROPER, AND THE ARBITRATOR’S DISMISSAL OF THE CHARGES VIOLATED PUBLIC POLICY, THIRD DEPARTMENT PROVIDED A COMPREHENSIVE DISCUSSION OF A COURT’S POWER TO REVIEW AN ARBITRATOR’S DECISION (THIRD DEPT))/EMPLOYMENT LAW (ARBITRATION, ARBITRATOR’S INTERIM DECISION RE PETITIONER’S SUSPENSION WITHOUT PAY WAS IMPROPER, AND THE ARBITRATOR’S DISMISSAL OF THE CHARGES VIOLATED PUBLIC POLICY, THIRD DEPARTMENT PROVIDED A COMPREHENSIVE DISCUSSION OF A COURT’S POWER TO REVIEW AN ARBITRATOR’S DECISION (THIRD DEPT))/CONTRACT LAW (COLLECTIVE BARGAINING AGREEMENT, ARBITRATOR’S INTERIM DECISION RE PETITIONER’S SUSPENSION WITHOUT PAY WAS IMPROPER, AND THE ARBITRATOR’S DISMISSAL OF THE CHARGES VIOLATED PUBLIC POLICY, THIRD DEPARTMENT PROVIDED A COMPREHENSIVE DISCUSSION OF A COURT’S POWER TO REVIEW AN ARBITRATOR’S DECISION (THIRD DEPT))/COLLECTIVE BARGAINING AGREEMENT (ARBITRATOR’S INTERIM DECISION RE PETITIONER’S SUSPENSION WITHOUT PAY WAS IMPROPER, AND THE ARBITRATOR’S DISMISSAL OF THE CHARGES VIOLATED PUBLIC POLICY, THIRD DEPARTMENT PROVIDED A COMPREHENSIVE DISCUSSION OF A COURT’S POWER TO REVIEW AN ARBITRATOR’S DECISION (THIRD DEPT))

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SUPREME COURT SHOULD HAVE DETERMINED THE CONTESTED PROMOTION OF A SHERIFF’S DISPATCHER WAS ARBITRABLE UNDER THE COLLECTIVE BARGAINING AGREEMENT (FOURTH DEPT).

The Fourth Department, reversing Supreme Court, determined the petitioner-county’s motion to permanently stay arbitration should not have been granted. The respondent-union filed a grievance on behalf of a part-time sheriff’s dispatcher when another dispatcher was made full-time:

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The Court of Appeals has set forth a two-pronged test to determine “whether a grievance is arbitrable” (Matter of City of Johnstown [Johnstown Police Benevolent Assn.], 99 NY2d 273, 278 [Johnstown] …). In the first prong of the test, known as “the may-they-arbitrate’ prong,” we “ask whether there is any statutory, constitutional or public policy prohibition against arbitration of the grievance” … . If we conclude that arbitration is not prohibited, we move to the second prong, known as “the did-they-agree-to-arbitrate’ prong,” in which we “examine the CBA to determine if the parties have agreed to arbitrate the dispute at issue” … .

Here, petitioner does not contend that arbitration of [the dispatcher’s] grievance is prohibited, and we therefore are concerned only with the second prong of the Johnstown test. With respect to that issue, “[i]t is well settled that, in deciding an application to stay or compel arbitration under CPLR 7503, the court is concerned only with the threshold determination of arbitrability, and not with the merits of the underlying claim”… . Furthermore, “[w]here, as here, there is a broad arbitration clause and a reasonable relationship’ between the subject matter of the dispute and the general subject matter of the parties’ [CBA], the court should rule the matter arbitrable, and the arbitrator will then make a more exacting interpretation of the precise scope of the substantive provisions of the [CBA], and whether the subject matter of the dispute fits within them’ ” … . Matter of Lewis County (CSEA Local 1000, AFSCME, AFL-CIO, Lewis County Sheriff’s Empls. Unit #7250-03, Lewis County Local 825), 2017 NY Slip Op 06743, Fourth Dept 9-29-17

 

ARBITRATION (COLLECTIVE BARGAINING AGREEMENT, SUPREME COURT SHOULD HAVE DETERMINED THE CONTESTED PROMOTION OF A SHERIFF’S DISPATCHER WAS ARBITRABLE UNDER THE COLLECTIVE BARGAINING AGREEMENT (FOURTH DEPT))/EMPLOYMENT LAW (COLLECTIVE BARGAINING AGREEMENT, SUPREME COURT SHOULD HAVE DETERMINED THE CONTESTED PROMOTION OF A SHERIFF’S DISPATCHER WAS ARBITRABLE UNDER THE COLLECTIVE BARGAINING AGREEMENT (FOURTH DEPT))/MUNICIPAL LAW  (COLLECTIVE BARGAINING AGREEMENT, SUPREME COURT SHOULD HAVE DETERMINED THE CONTESTED PROMOTION OF A SHERIFF’S DISPATCHER WAS ARBITRABLE UNDER THE COLLECTIVE BARGAINING AGREEMENT (FOURTH DEPT))/COLLECTIVE BARGAINING AGREEMENT (ARBITRATION, SUPREME COURT SHOULD HAVE DETERMINED THE CONTESTED PROMOTION OF A SHERIFF’S DISPATCHER WAS ARBITRABLE UNDER THE COLLECTIVE BARGAINING AGREEMENT (FOURTH DEPT))/UNIONS (ARBITRATION, SUPREME COURT SHOULD HAVE DETERMINED THE CONTESTED PROMOTION OF A SHERIFF’S DISPATCHER WAS ARBITRABLE UNDER THE COLLECTIVE BARGAINING AGREEMENT (FOURTH DEPT))

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SUPREME COURT SHOULD HAVE DETERMINED THE PROPER PAY FOR A TEACHER WAS ARBITRABLE UNDER THE COLLECTIVE BARGAINING AGREEMENT (FOURTH DEPT).

The Fourth Department, reversing Supreme Court, determined a matter concerning the proper pay for a teacher was arbitrable under the collective bargaining agreement (CBA). The school districts (petitioner’s) motion to permanently stay arbitration should not have been granted:

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… [R]espondent (union) filed a grievance on behalf of one of its members, a teacher, alleging that petitioner had violated the provisions of the CBA that require petitioner to maintain salary schedules in an ethical manner, to adjust teacher salaries based on graduate credits earned, and to abide by the salary schedules. …

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It is well settled that courts must apply a two-part test to determine whether a matter is subject to arbitration under a CBA … . “First, the court must determine whether there is any statutory, constitutional or public policy prohibition against arbitration of the grievance’ ” … . If there is no such prohibition, the court must examine the CBA to determine “whether the parties in fact agreed to arbitrate the particular dispute” … . …

… [T]he arbitration of disputes concerning public school teachers’ salaries is not proscribed by law or public policy, and thus only the second prong is at issue … .

… The dispute concerns whether petitioner placed the teacher at the correct step of the salary schedule and paid her properly based on the graduate credits that she earned, and thus it is reasonably related to the general subject matter of the CBA …  Issues concerning whether the CBA supports a grievance arising from the initial placement of a new employee on the salary schedule, as opposed to the proper payment of an existing employee, “are matters involving the scope of the substantive [CBA] provisions and, as such, are for the arbitrator” to resolve … . … [T]he clause in the CBA stating that an arbitrator has “no power to alter, add to, or detract from” the CBA does not render the dispute nonarbitrable … . Matter of Thousand Is. Cent. Sch. Dist. v Thousand Is. Educ. Assn., 2017 NY Slip Op 06759, Fourth Dept 9-29-17

ARBITRATION (EMPLOYMENT LAW, SUPREME COURT SHOULD HAVE DETERMINED THE PROPER PAY FOR A TEACHER WAS ARBITRABLE UNDER THE COLLECTIVE BARGAINING AGREEMENT (FOURTH DEPT))/EMPLOYMENT LAW (TEACHERS, SUPREME COURT SHOULD HAVE DETERMINED THE PROPER PAY FOR A TEACHER WAS ARBITRABLE UNDER THE COLLECTIVE BARGAINING AGREEMENT (FOURTH DEPT))/EDUCATION-SCHOOL LAW  (TEACHERS, SUPREME COURT SHOULD HAVE DETERMINED THE PROPER PAY FOR A TEACHER WAS ARBITRABLE UNDER THE COLLECTIVE BARGAINING AGREEMENT (FOURTH DEPT))/TEACHERS (EMPLOYMENT LAW, SUPREME COURT SHOULD HAVE DETERMINED THE PROPER PAY FOR A TEACHER WAS ARBITRABLE UNDER THE COLLECTIVE BARGAINING AGREEMENT (FOURTH DEPT))/UNIONS (TEACHERS, SUPREME COURT SHOULD HAVE DETERMINED THE PROPER PAY FOR A TEACHER WAS ARBITRABLE UNDER THE COLLECTIVE BARGAINING AGREEMENT (FOURTH DEPT))/COLLECTIVE BARGAINING AGREEMENT (TEACHERS, SUPREME COURT SHOULD HAVE DETERMINED THE PROPER PAY FOR A TEACHER WAS ARBITRABLE UNDER THE COLLECTIVE BARGAINING AGREEMENT (FOURTH DEPT))

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UNION’S CLAIM MEDICAL TREATMENT FOR LINE OF DUTY INJURIES WAS BEING UNDULY DELAYED OR DENIED WAS ARBITRABLE, WHETHER THE UNDERLYING GRIEVANCE WAS TIMELY BROUGHT MUST BE DETERMINED BY THE ARBITRATOR, NOT THE COURT (SECOND DEPT).

The Second Department determined that the city’s petition to permanently stay arbitration was properly dismissed. The court described the criteria for determining whether a matter is arbitrable pursuant to a collective bargaining agreement (CBA). The court further held that whether the underlying grievance was timely brought must be determined by the arbitrator because the CBA was silent on the issue. The city firefighters (Local 628) sought arbitration of whether medical treatment for line of duty injuries (General Municipal Law 207-a) was being unduly delayed or denied:

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“In analyzing whether the parties in fact agreed to arbitrate the particular dispute, a court is merely to determine whether there is a reasonable relationship between the subject matter of the dispute and the general subject matter of the CBA'” … . Here, the relevant arbitration provisions of the CBA are broad, as they provide for arbitration of any grievance “involving the interpretation or application of any provision of this Agreement,” which remains unresolved following completion of step two of the grievance procedure. Moreover, there is a reasonable relationship between the subject matter of the dispute, which involves the processing of General Municipal Law § 207-a benefits to firefighters injured in the line of duty, and Appendix C of the CBA which sets forth the procedures regulating “the application for, and the award of, benefits under section 207-a of the General Municipal Law” … .

The City’s contention that arbitration was precluded because Local 628’s grievance was not timely pursuant to step one of the grievance procedure is without merit. The “threshold determination of whether a condition precedent to arbitration exists and whether it has been complied with, is for the court to determine” … . By contrast, “[q]uestions concerning compliance with a contractual step-by-step grievance process have been recognized as matters of procedural arbitrability to be resolved by the arbitrators, particularly in the absence of a very narrow arbitration clause or a provision expressly making compliance with the time limitations a condition precedent to arbitration” … . Matter of City of Yonkers v Yonkers Fire Fighters, Local 628, IAFF, AFL-CIO, 2017 NY Slip Op 06073, Second Dept 8-9-17

 

ARBITRATION (UNION’S CLAIM MEDICAL TREATMENT FOR LINE OF DUTY INJURIES WAS BEING UNDULY DELAYED OR DENIED WAS ARBITRABLE, WHETHER THE UNDERLYING GRIEVANCE WAS TIMELY BROUGHT MUST BE DETERMINED BY THE ARBITRATOR, NOT THE COURT (SECOND DEPT))/EMPLOYMENT LAW (ARBITRATION, COLLECTIVE BARGAINING AGREEMENT, UNION’S CLAIM MEDICAL TREATMENT FOR LINE OF DUTY INJURIES WAS BEING UNDULY DELAYED OR DENIED WAS ARBITRABLE, WHETHER THE UNDERLYING GRIEVANCE WAS TIMELY BROUGHT MUST BE DETERMINED BY THE ARBITRATOR, NOT THE COURT (SECOND DEPT))/MUNICIPAL LAW (ARBITRATION, UNION’S CLAIM MEDICAL TREATMENT FOR LINE OF DUTY INJURIES WAS BEING UNDULY DELAYED OR DENIED WAS ARBITRABLE, WHETHER THE UNDERLYING GRIEVANCE WAS TIMELY BROUGHT MUST BE DETERMINED BY THE ARBITRATOR, NOT THE COURT (SECOND DEPT))/COLLECTIVE BARGAINING AGREEMENT (ARBITRATION, (UNION’S CLAIM MEDICAL TREATMENT FOR LINE OF DUTY INJURIES WAS BEING UNDULY DELAYED OR DENIED WAS ARBITRABLE, WHETHER THE UNDERLYING GRIEVANCE WAS TIMELY BROUGHT MUST BE DETERMINED BY THE ARBITRATOR, NOT THE COURT (SECOND DEPT)) 

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THE DISCIPLINE AND SUSPENSION OF STUDENTS ARE NOT ARBITRABLE TOPICS, ARBITRATION WOULD CONFLICT WITH PUBLIC POLICY AFFORDING DISCRETION TO SCHOOL DISTRICTS 2ND DEPT.

The Second Department determined the disciplining and suspension of  students were not arbitrable topics because there is a public policy affording the school district discretion in those areas:

In determining whether a dispute between a public sector employer and employee is arbitrable, a court must first determine whether ” there is any statutory, constitutional or public policy prohibition against arbitration of the grievance'”… . If there is no prohibition against arbitration, the court must examine the parties’ collective bargaining agreement to determine “whether the parties in fact agreed to arbitrate the particular dispute”…

Here, the appellant demanded arbitration to compel the petitioner, the Board of Education of the Newburgh Enlarged City School District, to implement certain measures regarding the discipline and suspension of students. Since New York’s Education Law grants discretion to boards of education to implement disciplinary rules and regulations in schools … , such demands are nonarbitrable on public policy grounds … . Matter of Board of Educ. of the Newburgh Enlarged City Sch. Dist. v Newburgh Teachers’ Assn., 2017 NY Slip Op 05817, 2nd Dept 7-25-17

EDUCATION-SCHOOL LAW (ARBITRATION, THE DISCIPLINE AND SUSPENSION OF STUDENTS ARE NOT ARBITRABLE TOPICS, ARBITRATION WOULD CONFLICT WITH PUBLIC POLICY AFFORDING DISCRETION TO SCHOOL DISTRICTS 2ND DEPT)/ARBITRATION (EDUCATION-SCHOOL LAW, THE DISCIPLINE AND SUSPENSION OF STUDENTS ARE NOT ARBITRABLE TOPICS, ARBITRATION WOULD CONFLICT WITH PUBLIC POLICY AFFORDING DISCRETION TO SCHOOL DISTRICTS 2ND DEPT)

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A CLAUSE IN AN EMPLOYMENT CONTRACT PURPORTING TO WAIVE THE RIGHT TO BRING A CLASS ACTION SUIT AND SUBMIT COLLECTIVE CLAIMS TO ARBITRATION VIOLATED THE NATIONAL LABOR RELATIONS ACT AND IS UNENFORCEABLE 1ST DEPT.

The First Department, modifying Supreme Court, in a full-fledged opinion by Justice Moskowitz, over a two-justice dissenting opinion, determined an arbitration provision in plaintiff insurance agent’s employment contract was unenforceable with respect to collective actions, here a class action concerning wage and hour claims:

… [W]e conclude … that arbitration provisions such as the one in [plaintiff’s] contract, which prohibit class, collective, or representative claims, violate the National Labor Relations Act (NLRA) and thus, that those provisions are unenforceable.

In reaching this conclusion, we agree with the reasoning in Lewis v Epic Sys. Corp. (823 F3d 1147 [7th Cir 2016], cert granted __ US __, 137 S Ct 809 [2017]), the recent case from the United States Court of Appeals for the Seventh Circuit, which addressed the enforceability of arbitration agreements prohibiting collective actions. In Lewis, the plaintiff employee agreed to an arbitration agreement mandating that wage and hour claims could be brought only through]individual arbitration and requiring employees to waive “the right to participate in or receive money or any other relief from any class, collective, or representative proceeding” … . The arbitration agreement also included a clause stating that if the waiver were unenforceable, “any claim brought on a class, collective, or representative action basis must be filed in a court of competent jurisdiction” … .

… The plaintiff [in Lewis] argued that the arbitration clause violated the NLRA because it interfered with employees’ right to engage in concerted activities for mutual aid and protection, and was therefore unenforceable … .

The Seventh Circuit denied the employer’s motion to proceed under the arbitration clause, declining to enforce a clause that precluded employees from “seeking any class, collective, or representative remedies to wage-and-hour disputes” because the clause “violate[d] Sections 7 and 8 of the NLRA” (id. at 1161). According to the Court, section 7 of the NLRA provided that employees have the right to engage in concerted activities, and concerted activities “have long been held to include resort to . . . judicial forums” (id. at 1152) [internal quotation marks omitted]. The Seventh Circuit also found that a lawsuit filed “by a group of employees to achieve more favorable terms or conditions of employment” is considered to constitute “concerted activity” under section 7 of the NLRA (id.) [internal quotation marks omitted). Accordingly, the Court held, contracts such as the one at issue were unenforceable under the NLRA because they “stipulate away employees’ [s]ection 7 rights or otherwise require actions unlawful under the NRLA” (id. at 1155). Gold v New York Life Ins. Co., 2017 NY Slip Op 05695, 1st Dept 7-18-17

CIVIL PROCEDURE (CLASS ACTIONS, EMPLOYMENT LAW, A CLAUSE IN AN EMPLOYMENT CONTRACT PURPORTING TO WAIVE THE RIGHT TO BRING A CLASS ACTION SUIT AND SUBMIT COLLECTIVE CLAIMS TO ARBITRATION VIOLATED THE NATIONAL LABOR RELATIONS ACT AND IS UNENFORCEABLE 1ST DEPT)/CLASS ACTIONS (EMPLOYMENT LAW,  A CLAUSE IN AN EMPLOYMENT CONTRACT PURPORTING TO WAIVE THE RIGHT TO BRING A CLASS ACTION SUIT AND SUBMIT COLLECTIVE CLAIMS TO ARBITRATION VIOLATED THE NATIONAL LABOR RELATIONS ACT AND IS UNENFORCEABLE 1ST DEPT)/EMPLOYMENT LAW (CLASS ACTIONS, ARBITRATION,  A CLAUSE IN AN EMPLOYMENT CONTRACT PURPORTING TO WAIVE THE RIGHT TO BRING A CLASS ACTION SUIT AND SUBMIT COLLECTIVE CLAIMS TO ARBITRATION VIOLATED THE NATIONAL LABOR RELATIONS ACT AND IS UNENFORCEABLE 1ST DEPT)/ARBITRATION (EMPLOYMENT LAW, CLASS ACTIONS,  A CLAUSE IN AN EMPLOYMENT CONTRACT PURPORTING TO WAIVE THE RIGHT TO BRING A CLASS ACTION SUIT AND SUBMIT COLLECTIVE CLAIMS TO ARBITRATION VIOLATED THE NATIONAL LABOR RELATIONS ACT AND IS UNENFORCEABLE 1ST DEPT)/CONTRACT LAW (EMPLOYMENT LAW, ARBITRATION,  A CLAUSE IN AN EMPLOYMENT CONTRACT PURPORTING TO WAIVE THE RIGHT TO BRING A CLASS ACTION SUIT AND SUBMIT COLLECTIVE CLAIMS TO ARBITRATION VIOLATED THE NATIONAL LABOR RELATIONS ACT AND IS UNENFORCEABLE 1ST DEPT)/INSURANCE LAW (EMPLOYMENT LAW, ARBITRATION, A CLAUSE IN AN EMPLOYMENT CONTRACT PURPORTING TO WAIVE THE RIGHT TO BRING A CLASS ACTION SUIT AND SUBMIT COLLECTIVE CLAIMS TO ARBITRATION VIOLATED THE NATIONAL LABOR RELATIONS ACT AND IS UNENFORCEABLE 1ST DEPT)

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ARBITRATION AWARD IN DISPUTE OVER TELEVISION BROADCAST FEES FOR MAJOR LEAGUE BASEBALL PROPERLY VACATED BASED UPON COUNSEL’S CONFLICTS OF INTEREST, SECOND ARBITRATION SHOULD NOT BE MOVED TO A DIFFERENT FORUM 1ST DEPT.

The First Department, in an opinion consisting of a two-justice concurrence, a separate one-justice concurrence and a two-justice partial dissent, determined that the arbitration of a dispute concerning the television broadcast fees for major league baseball was tainted by counsel’s conflicts of interest (and the award was properly vacated on that ground). The bulk of the opinions dealt with whether the court should order that the second arbitration be held in a different forum. The majority concluded it should not:

Pursuant to the negotiated terms of the parties’ written agreement, the subject arbitration, governed by the Federal Arbitration Act (FAA) (9 USC § 1 et seq.), was initiated before the Revenue Sharing Definitions Committee (RSDC) of Major League Baseball (MLB), to resolve a contractual dispute over telecast rights fees between TCR Sports Broadcasting Holding, LLP d/b/a the Mid-Atlantic Sports Network (MASN) and the Baltimore Orioles, and the Washington Nationals. For the reasons stated herein, we find that the arbitration award issued by the RSDC on June 30, 2014 was correctly vacated based on “evident partiality” (9 USC § 10[a][2]) arising out of the Nationals’ counsel’s unrelated representations at various times of virtually every participant in the arbitration except for MASN and the Orioles, and the failure of MLB and the RSDC, despite repeated protests, to provide MASN and the Orioles with full disclosure or to remedy the conflict before the arbitration hearing was held. However, even if this Court has the inherent power to disqualify an arbitration forum in an exceptional case, on the record before us there is no basis, in law or in fact, to direct that the second arbitration be heard in a forum other than the industry-insider committee that the parties selected in their agreement to resolve this particular dispute, fully aware of the role MLB would play in the arbitration process.

Contrary to the view of the dissent, there has been no showing of bias or corruption on the part of the members of the reconstituted RSDC, and the Nationals will use new counsel at the second arbitration. Speculation that MLB will dictate the outcome of the second arbitration by exerting pressure on the new members of the RSDC does not suffice to establish that they will not exercise their independent judgment or carry out their duties impartially, or that the proceedings will be fundamentally unfair. Matter of TCR Sports Broadcasting Holding, LLP v WN Partner, LLC, 2017 NY Slip Op 05689, 1st Dept 7-13-17

ARBITRATION (ATTORNEYS, CONFLICTS OF INTEREST, MAJOR LEAGUE BASEBALL, ARBITRATION AWARD IN DISPUTE OVER TELEVISION BROADCAST FEES FOR MAJOR LEAGUE BASEBALL PROPERLY VACATED BASED UPON COUNSEL’S CONFLICTS OF INTEREST, SECOND ARBITRATION SHOULD NOT BE MOVED TO A DIFFERENT FORUM 1ST DEPT)/CONTRACT LAW (ARBITRATION, ATTORNEYS, CONFLICTS OF INTEREST, MAJOR LEAGUE BASEBALL, ARBITRATION AWARD IN DISPUTE OVER TELEVISION BROADCAST FEES FOR MAJOR LEAGUE BASEBALL PROPERLY VACATED BASED UPON COUNSEL’S CONFLICTS OF INTEREST, SECOND ARBITRATION SHOULD NOT BE MOVED TO A DIFFERENT FORUM 1ST DEPT)/ATTORNEYS (CONFLICTS OF INTEREST, MAJOR LEAGUE BASEBALL, ARBITRATION AWARD IN DISPUTE OVER TELEVISION BROADCAST FEES FOR MAJOR LEAGUE BASEBALL PROPERLY VACATED BASED UPON COUNSEL’S CONFLICTS OF INTEREST, SECOND ARBITRATION SHOULD NOT BE MOVED TO A DIFFERENT FORUM 1ST DEPT)/CONFLICT OF INTEREST (ATTORNEYS, MAJOR LEAGUE BASEBALL, ARBITRATION AWARD IN DISPUTE OVER TELEVISION BROADCAST FEES FOR MAJOR LEAGUE BASEBALL PROPERLY VACATED BASED UPON COUNSEL’S CONFLICTS OF INTEREST, SECOND ARBITRATION SHOULD NOT BE MOVED TO A DIFFERENT FORUM 1ST DEPT)/BASEBALL (ARBITRATION, ATTORNEYS, CONFLICTS OF INTEREST, MAJOR LEAGUE BASEBALL, ARBITRATION AWARD IN DISPUTE OVER TELEVISION BROADCAST FEES FOR MAJOR LEAGUE BASEBALL PROPERLY VACATED BASED UPON COUNSEL’S CONFLICTS OF INTEREST, SECOND ARBITRATION SHOULD NOT BE MOVED TO A DIFFERENT FORUM 1ST DEPT)

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OFFICERS AND EMPLOYEES OF DEFENDANT CORPORATION, ALTHOUGH NON-SIGNATORIES, CAN ENFORCE THE ARBITRATION PROVISION OF THE CONTRACT BETWEEN PLAINTIFF AND THE CORPORATION 2ND DEPT.

The Second Department, reversing Supreme Court, determined individual defendants, who were officers and/or employees of defendant corporation McGowan Builders, Inc, could enforce the agreement to arbitrate made between plaintiff and the corporation:

Here, the alleged misconduct attributed to the individual defendants in the complaint related to their behavior as employees and officers of McGowan Builders. Since “a corporation can only act through its officers and employees” … , any breach of the agreement would necessarily have to occur as a result of some action or inaction attributable to an officer or employee of McGowan Builders. As the Court of Appeals has recognized under similar circumstances, a rule allowing corporate officers and employees to enforce arbitration agreements entered into by their corporation “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” … . Under the circumstances of this case, the individual defendants were entitled to enforce the arbitration provision contained in the subcontract agreement between McGowan Builders and the plaintiff … . Accordingly, the Supreme Court should have granted that branch of the motion of the moving defendants, including the individual defendants, which was to compel arbitration of the causes of action alleging conversion, unfair competition, and tortious interference insofar as asserted against them. Degraw Constr. Group, Inc. v McGowan Bldrs., Inc., 2017 NY Slip Op 05580, 2nd Dept 7-12-17

ARBITRATION (OFFICERS AND EMPLOYEES OF DEFENDANT CORPORATION, ALTHOUGH NON-SIGNATORIES, CAN ENFORCE THE ARBITRATION PROVISION OF THE CONTRACT BETWEEN PLAINTIFF AND THE CORPORATION 2ND DEPT)/CONTRACT LAW (ARBITRATION, OFFICERS AND EMPLOYEES OF DEFENDANT CORPORATION, ALTHOUGH NON-SIGNATORIES, CAN ENFORCE THE ARBITRATION PROVISION OF THE CONTRACT BETWEEN PLAINTIFF AND THE CORPORATION 2ND DEPT)/CORPORATION LAW (ARBITRATION, OFFICERS AND EMPLOYEES OF DEFENDANT CORPORATION, ALTHOUGH NON-SIGNATORIES, CAN ENFORCE THE ARBITRATION PROVISION OF THE CONTRACT BETWEEN PLAINTIFF AND THE CORPORATION 2ND DEPT)

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INSURER’S MOTION TO STAY ARBITRATION SHOULD NOT HAVE BEEN DISMISSED AS UNTIMELY, RESPONDENT HAD WAIVED ARBITRATION BY STARTING LITIGATION, TIME RESTRICTIONS ON A MOTION FOR A STAY DID NOT APPLY.

The First Department, reversing Supreme Court, noted that the motion for a stay of arbitration brought by the insurer (petitioner) in this underinsured motorist benefits action, although untimely under the CPLR, should not have been dismissed on that ground. Respondent had waived arbitration by instigating litigation so the time restrictions on a motion to stay did not apply (even though the insurer had participated in the arbitration):

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Petitioner seeks to permanently stay an underinsured motorist benefits arbitration proceeding brought by respondent in New York.

The motion court erred in dismissing the motion to stay as untimely. The time restrictions set forth at CPLR 7503(c) do not apply where, as here, respondent waived her right to arbitrate by initiating litigation on the same claims … . “[O]nce waived, the right to arbitrate cannot be regained, even by the respondent’s failure to [timely] seek a stay of arbitration” … .

That petitioner participated, under objection, in the arbitration is immaterial. Even if the arbitration had been completed and an award issued, the award would be subject to vacatur on the ground that the arbitrator lacked authority to conduct the arbitration … . Matter of Allstate Ins. Co. v Howell, 2017 NY Slip Op 04406, 1st Dept 6-6-17

 

ARBITRATION (INSURANCE LAW, INSURER’S MOTION TO STAY ARBITRATION SHOULD NOT HAVE BEEN DISMISSED AS UNTIMELY, RESPONDENT HAD WAIVED ARBITRATION BY STARTING LITIGATION, TIME RESTRICTIONS ON A MOTION FOR A STAY DID NOT APPLY)/INSURANCE LAW (ARBITRATION, INSURER’S MOTION TO STAY ARBITRATION SHOULD NOT HAVE BEEN DISMISSED AS UNTIMELY, RESPONDENT HAD WAIVED ARBITRATION BY STARTING LITIGATION, TIME RESTRICTIONS ON A MOTION FOR A STAY DID NOT APPLY)

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FAILURE TO APPLY FOR A STAY OF ARBITRATION WAIVES ANY CLAIM THE ARBITRATOR HAS EXCEEDED HIS/HER POWERS.

The Second Department, in a loss-transfer action between two insurers, noted that the failure to apply for a stay of arbitration waives any claim that the arbitrator has exceeded his/her powers:

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The petitioner’s contention that, pursuant to 11 NYCRR 65-4.11(6), its “good faith” retroactive denial of insurance coverage divested the arbitrator of jurisdiction is without merit (see State Farm Mut. Auto. Ins. Co. v Nationwide Mut. Ins. Co., 150 AD2d 976, 977-978). Insurance Law § 5105(b) provides that arbitration is the only forum in which a loss-transfer claim may be litigated … . Moreover, “the contention that a claim proposed to be submitted to arbitration is in excess of the arbitrator’s power is waived unless raised by an application for a stay” … . By failing to apply for a stay of arbitration before arbitration, the petitioner waived its contention that the claim is not arbitrable under Insurance Law § 5105 … . Matter of Infinity Indem. Ins. Co. v Hereford Ins. Co., 2017 NY Slip Op 03177, 2nd Dept 4-26-17

ARBITRATION (FAILURE TO APPLY FOR A STAY OF ARBITRATION WAIVES ANY CLAIM THE ARBITRATOR HAS EXCEEDED HIS/HER POWERS)/INSURANCE (ARBITRATION OF LOSS-TRANSFER CLAIM BETWEEN TWO INSURERS, FAILURE TO APPLY FOR A STAY OF ARBITRATION WAIVES ANY CLAIM THE ARBITRATOR HAS EXCEEDED HIS/HER POWERS)/LOSS-TRANSFER CLAIMS (INSURANCE LAW, ARBITRATION, FAILURE TO APPLY FOR A STAY OF ARBITRATION WAIVES ANY CLAIM THE ARBITRATOR HAS EXCEEDED HIS/HER POWERS)

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