United States: Arbitrability Of Grievances Under School CBAs

While the term Agrievance does not include any matters involving an employees rate of pay, retirement benefits, disciplinary proceedings or any other matter reviewable pursuant to law,³ those matters are typically part of a collective bargaining agreement, and are subject to the grievance procedures established in the agreement. The authority to include such matters in a collective bargaining agreement is set out in the Public Employees Fair Employment Act, Civil Service Law Article 14, more commonly known as the ATaylor Law.⁴

Most grievance procedures in collective bargaining agreements are Aprogressive in nature. That is, they consist of several levels of review, frequently ending in arbitration. While General Municipal Law Article 15-C provides only for Aadvisory arbitration as a resolution of disputes, parties to a collective bargaining agreement may, absent clear prohibitions derived from constitutional, statutory, or common-law principles, agree to binding arbitration as a forum for the ultimate and final resolution of a dispute.⁵

An issue which must often be addressed is whether a particular grievance is arbitrable. Put differently, the question is whether the particular issue may be properly decided by an arbitrator or whether an attempt should be made to obtain a stay pursuant to CPLR '7503. This article is intended to address the issue of arbitrability in the public sector, and to serve as a resource by reviewing recent cases which have decided the issue.

In Matter of Acting Sup. of Schools of Liverpool Cent. Sch. Dist. (United Liverpool Faculty Assn.),⁶ the New York Court of Appeals established a two-step test which has become the standard applied by New York courts to determine whether a public sector grievance is arbitrable. According to Liverpool, the first step requires a determination as to whether the Taylor Law authorizes arbitration of the particular subject matter. If so, the second step then requires a determination as to whether the parties had agreed to refer the particular dispute or grievance to arbitration pursuant to the terms of the collective bargaining agreement.

In the majority of cases, under the first step of the Liverpool test, public employers typically argue that submission of a particular issue to arbitration would deprive the government of its decision-making prerogatives, or would otherwise result in the delegation of the sovereign authority.⁷ Simply put then, the first step addresses whether statutory, constitutional or public policy restrictions render certain disputes non-arbitrable. While these Adeprivation arguments have intuitive appeal, courts are loathe to uphold such arguments, and have effectively vitiated this first step by repeatedly rebuffing attempts of public employers to avoid arbitration under this step of the Liverpool test. Unsuccessful attempts to evade arbitration under this step include issues of the right of a teachers association to the use of school district office space;⁸ an employees entitlement to rehiring based on seniority;⁹ discipline of a probationary teacher;¹⁰ teacher evaluations;¹¹ and denial of an employees sabbatical leave,¹² among others.

While employers have clearly not enjoyed any great degree of success under the first step of the Liverpool test, there have been some cases where the courts have sided with the public employer, and have found that a dispute is not arbitrable. These cases include disputes over seniority as it relates to academic standards¹³; decisions regarding tenure¹⁴; and disputes over access by the board of education to teachers personnel files.¹⁵

If, under the first step of the Liverpool test, the Taylor Law authorizes the arbitration of a particular issue, courts then proceed to the second step, and consider whether the parties actually agreed to arbitrate the particular dispute. This step requires an analysis of the grievance provisions of the collective bargaining agreement. While some agreements define a Agrievance more generously, or grant a broader authority to arbitrate than others, the courts remain decidedly in favor of finding that the parties have, in fact, agreed to arbitrate.

This evolution of case law is ironic. The court in Liverpool took pains to distance itself from the presumption of arbitrability which had developed in the private sector as a result of the Supreme Court decision in United Steelworkers of Am. v. Warrior & Gulf Nav. Co.¹⁶ In fact, the court in Liverpool stated that, at least in 1977, Aarbitration [did] not yet carry the same historical and general acceptance in the public sector as it did in the private sector.¹⁷ Rather than rely on a presumption which, according to the court, can serve to Aobfuscate rather than advance analysis, the court devised the two-step inquiry.

In Board of Education of Watertown City School District v. Watertown Education Association¹⁸, the Court of Appeals recognized that arbitration in the public sector has come a long way since 1977, and that public sector arbitration Ais a reality and it is widespread.¹⁹ In Watertown, the teachers association filed a grievance over an increase in the cap on health insurance co-payments. The grievance was denied, and the association ultimately made a demand for arbitration. The school district sought to stay the arbitration on the grounds that the dispute was not covered by the collective bargaining agreement. In denying the stay, the Court discussed the Liverpool decision in detail. The Court noted that Liverpool did not expressly create a presumption against arbitrability in the public sector. Nevertheless, it implied that the decision has been perceived as coming dangerously close to establishing such a presumption. However, the Court of Appeals has recently removed any such bias, and has reinforced the Liverpool two-step test, holding that Ato the extent [that a presumption against public sector arbitrability] may be implied or fairly so characterized, an anti-arbitrational presumption is no longer justified, either in law, or in the public sector labor environment.²⁰

The Court also took steps to ensure that the Liverpool analysis will continue to be used as the method to analyze arbitrability in public sector cases, unfettered by a presumption for or against arbitrability. In doing so, the Court stated that A[w]e will stay with the Liverpool format because it has been workable for over two decades, with results that have largely comported with the Steelworkers presumption with respect to [collective bargaining agreement] interpretation. We will preserve the two-step Liverpool analysis for judicial threshold consideration, free of any presumptions.²¹

Parties often include specific language in the collective bargaining agreement that requires questions of arbitrability to be resolved by the arbitrator. In the alternative, the parties may, once a grievance arises, agree to submit such a question to the arbitrator. However, when one party seeks a stay of arbitration, an order compelling arbitration or a review or enforcement of an arbitration award, the courts, rather than an arbitrator, must address the question of arbitrability.

According to the Court in Watertown, when courts must decide the question of arbitrability, courts should not act as an arbitrator, and should not interpret the scope of the substantive provisions of the contract or examine the merits of the grievance. In that regard, CPLR '7501 states that when determining a matter involving agreements to arbitrate, Athe 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. Rather, according to Watertown, courts Ashould merely determine whether there is a reasonable relationship between the subject matter of the dispute and the general subject matter of the [collective bargaining agreement].²² Absent such a relationship, the matter is not arbitrable as a matter of law. If, however, such a reasonable relationship exists, then courts may rule the matter arbitrable, and turn the matter over to the arbitrator for Aa more exacting interpretation of the precise scope of the substantive provisions of the [collective bargaining agreement], and whether the subject matter of the dispute fits within them.²³

Since Watertown, courts have had an opportunity to apply the Areasonable relationship test in the school setting. The case of In Re: Odessa-Montour Cent. School Dist.²⁴ involved an employee who retired in 1991, opted out of his health insurance coverage and relied instead on his wifes policy. His wife was an active employee of the same school district. The employee attempted to re-enroll in the insurance plan seven years later, after his wife took an unpaid leave from her job. In considering the school districts application for a stay of arbitration, the court noted that the term Agrievance was defined in the collective bargaining agreement as Aa claim by any teacher or group of teachers . . . The court also acknowledged that the term Ateacher as defined in the collective bargaining agreement did not include retirees. Based on the foregoing, the court found that there was no reasonable relationship between Aa retirees attempt to re-enroll in a health insurance plan which he voluntarily opted out of seven years earlier . . . and the general subject matter of the collective bargaining agreement.

In the case of In Re: Richfield Springs Cent. School Dist.,²⁵ a union sought to arbitrate over a unilateral change in the company administering the school districts prescription drug plan. The school district sought a stay of arbitration. The collective bargaining agreement provided that Aany change in [insurance] plan or carrier shall be by mutual agreement of the parties. In light of the broad language used in the agreement, the court found that a reasonable relationship existed and, therefore, that the dispute was arbitrable. Having determined that the matter before it was arbitrable, the court, consistent with Watertown, stated that Apetitioners claims regarding the precise scope of the pertinent provisions of the parties agreement and the merits of the grievance are matters left for resolution by the arbitrator.

Since Liverpool, the courts have used a two-step approach for determining the arbitrability of disputes under public sector collective bargaining agreements. While the Courts holding in Liverpool raised some questions about a perceived judicial presumption against public sector arbitrability, the Court of Appeals has recently reaffirmed the Liverpool analysis, stripped of any presumptions.

In addition to solidifying the Liverpool test, the Court of Appeals provided that a reasonable relationship must exist between the subject matter of the dispute and the general provisions of the collective bargaining agreement. The Court further cautioned that, if arbitrable, a close review of the merits of the arbitration and the precise scope of the agreement are the province of the arbitrator and not the courts.

When involved in a dispute arising out of a public sector collective bargaining agreement, parties must keep in mind the standards used, and the appropriate role of the courts.

1. N.Y. Gen. Mun. Law §681 (McKinney 1999).
2. N.Y. Gen. Mun. Law §682 (McKinney 1999).
3. Id.
4. This Article, enacted in 1967, was named after Professor George W. Taylor of the University of Pennsylvania who served as chairman of Governor Nelson Rockefeller's Committee on Public Employee Relations.
5. N.Y. Civ. Serv. Law §204 (McKinney 2000); see Port Jefferson Station Teachers Ass'n., Inc. v. Brookhaven-Comsewogue Union Free Sch. Dist., 45 N.Y.2d 898, 411 N.Y.S.2d (1978).
6. 42 N.Y.2d 589, 399 N.Y.S.2d 189 (1977)
7. See, Watertown
8. Matter of Board of Educ. [Connetquot Teachers Assn.], 60 N.Y.2d 840, 470 N.Y.S.2d 132 (1983).
9. Board of Educ. v. Glaubman, 53 N.Y.2d 781, 439 N.Y.S.2d 907 (1981).
10. Board of Educ. v. Barni, 49 N.Y.2d 311, 425 N.Y.S.2d 554 (1980).
11. Matter of United Liverpool Faculty Assn v. Board of Educ., 52 N.Y.2d 1038, 438 N.Y.S.2d 505 (1981).
12. Board of Educ. v. Patchogue-Medford Congress of Teachers, 48 N.Y.2d 812, 424 N.Y.S.2d 122 (1979).
13. Honeoye Falls-Lima Cent. Sch. Dist. v. Honeoye Falls-Lima Educ. Ass'n., 49 N.Y.2d 732, 426 N.Y.S.2d 263 (1980).
14. Matter of Cohoes City Sch. Dist. v. Cohoes Teachers Ass'n., 40 N.Y.2d 774, 390 N.Y.S.2d 53 (1976).
15. Board of Educ. v. Areman, 41 N.Y.2d 527, 394 N.Y.S.2d 143 (1977).
16. 363 U.S. 574, 80 S.Ct. 1347 (1960).
17. Liverpool, at 513.
18. 93 N.Y.2d 132, 688 N.Y.S.2d 463 (1999).
19. Id. at 470.
20. Id. at 470.
21. Id. at 470.
22. Id. at 471
23. Id. at 471
24. 271 A.D.2d 931 706 N.Y.S.2d 771 (App. Div. 2000).
25. 270 A.D.2d 734, 705 N.Y.S.2d 709 (App. Div. 2000)