Case Title: In the Matter of New York City Transit Authority v. Transport Workers Union of America, Local 100

Citation: 

Docket Number: 

State: new-york

Court: New York Appellate Court

Date: 2010-02-18T00:00:00Z

Document:
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This opinion is uncorrected and subject to revision before
publication in the New York Reports.
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No. 4  
In the Matter of New York City 
Transit Authority,
            Respondent,
        v.
Transport Workers Union of 
America, Local 100, et al.,
            Appellants.
Beth M. Margolis, for appellants.
Baimusa Kamara, for respondent.
New York State United Teachers, amicus curiae.
LIPPMAN, Chief Judge:
The New York City Transit Authority (Transit Authority)
sought to terminate an employee in connection with allegations
that the employee assaulted a member of the public on a subway
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platform.  Pursuant to the grievance procedures of the collective
bargaining agreement (CBA) entered into by the Transit Authority
and the employee's union, Transport Workers Union, Local 100
(TWU), the matter was ultimately referred to an arbitrator.  The
arbitrator modified the penalty the Transit Authority sought to
impose, and we are asked to determine whether the arbitrator's
award must be vacated on the ground that the arbitrator exceeded
the power given to him by the CBA.  We conclude that the
arbitrator did not exceed his power.
The Transit Authority employee involved has been
employed as a Conductor since 1985.  On April 14, 2006, the
employee had a heated exchange with a member of the public
regarding the availability of express train service on a
particular subway train line.  According to the arbitrator's
factual findings, during the course of this dialogue, "not
without some provocation from the complainant," the employee
"forcefully 'laid hands' on the complainant."  The parties on
this appeal do not dispute the arbitrator’s finding that the
employee assaulted a Transit Authority customer.
That an assault was involved in the underlying
grievance affects the arbitrator's task under the CBA.  Article
II, § 2.1 (C) (19) (c) of the CBA provides, in relevant part:
"If there is presented to the [arbitrator]
for decision any charge which, if proved in
Court, would constitute a felony, or any
charge involving assault, . . . the question
to be determined by the [arbitrator] shall be
with respect to the fact of such conduct. 
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Where such charge is sustained by the
[arbitrator], the action by the Authority,
based thereon, shall be affirmed and
sustained by the [arbitrator] except if there
is presented to the [arbitrator] credible
evidence that the action by the Authority is
clearly excessive in light of the employee's
record and past precedent in similar cases. 
It is understood by the parties that this
exception will be used rarely and only to
prevent a clear injustice."
  
As his written opinion demonstrates, the arbitrator
plainly understood that Article II, § 2.1 (C) (19) (c) applied
given the nature of the allegations against the Transit Authority
employee.  The arbitrator explained that the Transit Authority
presented to him as "past precedent" five prior arbitration
awards where other arbitrators had upheld termination decisions,
and he discussed each of those matters in his written opinion. 
The arbitrator also discussed the record of the employee before
him whom the Transit Authority sought to terminate.  At the close
of his five-page opinion, the arbitrator concluded:
"I find the substantive differences between
this case, and those relied upon by the
Authority as 'precedent' render the
[employee] worthy of the 'exception',
regarding which arbitrators have judgmental
discretion under the Agreement provision
cited [above]." 
Based on this finding, the arbitrator modified the employee's
penalty from termination to reinstatement without back pay.  
The Transit Authority then commenced this CPLR article
75 proceeding seeking to vacate the arbitration award.  Supreme
Court concluded, inter alia, that the arbitrator had exceeded his
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power in modifying the penalty and granted the Transit
Authority's petition.  The Appellate Division affirmed, with two
Justices dissenting (60 AD3d 1 [2d Dept 2008]).  This appeal as
of right, pursuant to CPLR 5601 (a), followed.   
Of the three "narrow grounds" that may form the basis
for vacating an arbitrator's award - that it violates public
policy, is irrational, or "clearly exceeds a specifically
enumerated limitation on the arbitrator's power" (Matter of
United Fedn. of Teachers, Local 2, AFT, AFL-CIO v Board of Educ.
of City School Dist. of City of N.Y., 1 NY3d 72, 79 [2003],
quoting Matter of Board of Educ. of Arlington Cent. School Dist.
v Arlington Teachers Assn., 78 NY2d 33, 37 [1991]) - only the
last is argued on this appeal (see CPLR 7511 [b] [1] [iii]).  The
Transit Authority argues that the arbitrator exceeded his power
because the "past precedent" prong of the Article II, § 2.1 (C)
(19) (c) exception was not met, thus the prerequisites necessary
for the arbitrator to exercise discretion under that provision
were not satisfied.  The Transit Authority notes that the
arbitrator distinguished each of the precedential awards it
submitted to him and TWU's submissions did not include any "past
precedent"; thus, they posit, there was no "past precedent in
similar cases" for the arbitrator to rely on in concluding that
termination was a "clearly excessive" action by the Transit
Authority warranting a modification pursuant to the exception. 
The courts below agreed with the Transit Authority.  We do not.   
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The Transit Authority's view overlooks the settled law
in New York that it is "not for the court to interpret the
substantive conditions of the contract or to determine the merits
of the dispute" (Matter of United Fedn. of Teachers, 1 NY3d at
82-83, quoting Board of Educ., Lakeland Cent. School Dist. of
Shrub Oak v Barni, 51 NY2d 894, 895 [1980]; see CPLR 7501 ["In
determining any matter arising under this article, 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."]).  Under the subject provision of the
CBA, after an arbitrator in a case involving assault allegations
determines as a matter of fact that an assault did occur, the
applicability of the provision’s exception is a question uniquely
within the arbitrator’s power to decide.  Of course, the CBA
provides that the arbitrator in making that decision is to be
guided by "past precedent" and the employee's record, but it is
certainly not the role of the courts to chart a course as to how
the arbitrator is to apply "past precedent" or to determine if
the arbitrator strayed from the best route in the guise of
declaring that he exceeded his power (see Matter of Board of
Educ. of Watertown City School Dist. [Watertown Educ. Assn.], 93
NY2d 132, 143 [1999] ["While some case records contain enough
information for a court to make a penetrating analysis of the
scope of the substantive provisions of the CBA, an undertaking of
that kind is not the function of the court."]).  Under the CBA,
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the arbitrator had the power to decide if the exception applied. 
Thus, vacating the arbitrator's award on the ground asserted by
the Transit Authority would not involve a determination that he
exceeded his power; rather, it would entail the kind of "inapt
flirtation with the merits, or ... inappropriate use of the
judicial scalpel to split the hairs that mark the perimeters of
the contractual provisions" that "[h]istory, legislation, and
experience," not to mention our case law, dictate that we refrain
from (id.).
Here, Article II, § 2.1 (C) (19) (c) of the CBA
required the arbitrator to first determine whether an assault
occurred.  If an assault did occur, the arbitrator was then to
sustain the Transit Authority's action unless an application of
the arbitrator's discretion was warranted under the provision's
exception.  Having found that an assault occurred, whether an
application of the exception was warranted was the very question
submitted to arbitration under the CBA, and the arbitrator here
concluded that the exception applied.  Even when such
"interpretations and factual findings appear highly debatable" -
and we make no comment here on the merits of the arbitrator's
decision in this matter - "whether we agree with the arbitrator
is beside the point" (Matter of United Fedn. of Teachers, 1 NY3d
at 83).  
The Appellate Division majority was correct in
describing the CBA as a "direction to the arbitrator that
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reflects both the TWU's and the TA's intent that once an assault
charge is sustained, the TA-imposed penalty must be upheld except
in rare cases" (60 AD3d at 8).  But, it was the arbitrator who
was empowered to make the determination as to whether the matter
submitted was one of those rare cases. 
Accordingly, the order of the Appellate Division should
be reversed, with costs, and the petition dismissed.
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Matter of New York City Transit Authority v Transport Workers
Union of America, Local 100, et al.
No. 4
SMITH, J.(dissenting):
As I see it, this case turns on what standard of review
applies.  When an arbitrator interprets an ordinary term in a
contract, a court may overturn his decision only if it is
irrational, or contrary to public policy; if this were the
standard of review here, I would agree with the majority that the
arbitrator's award should be upheld.  But the contract clause now
in issue is an express limitation on the arbitrator's power.  In
such a case, under our precedents, the arbitrator's ruling is
reviewable for clear error, and I believe he clearly erred.
CPLR 7511(b)(1)(iii) says that an arbitrator's award
"shall be vacated" if the arbitrator "exceeded his power."  This
means, we have often said, that an award that "clearly exceeds a
specifically enumerated limitation on the arbitrator's power"
must be set aside (e.g. Matter of Henneberry v ING Capital
Advisors, LLC, 10 NY3d 278, 284 [2008], quoting New York City Tr.
Auth. v Transport Workers' Union of Am., Local 100, AFL-CIO, 6
NY3d 332, 336 [2005]).  The clause at issue here is just such a
"specifically enumerated limitation."  It is part of the section
of the agreement dealing with arbitration, and says that, where a
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"charge involving assault" has been substantiated, the
Authority's disciplinary action "shall be affirmed and sustained
by the [arbitrator]" in the absence of "credible evidence that
the action by the Authority is clearly excessive in light of the
employee's record and past precedent in similar cases."  Thus,
while as a general matter the parties to an arbitration agreement
put themselves very largely at the arbitrator's mercy, the
parties here sought not to do that, but to disable the arbitrator
from rejecting the penalty imposed by the Authority for an
assault, in the absence of the extraordinary circumstances the
agreement describes.
The question before us is whether the award the
arbitrator rendered "clearly exceeds" the agreement's limitation
on his power.  I conclude that it does.  The "employee's record"
shows that he had previously been suspended for "a customer
altercation."  This was eleven years before the incident now in
question, but the Authority could surely find that repeated
fights with customers, even once a decade, are unacceptable; most
of its employees no doubt avoid such incidents for their whole
careers.  And no "past precedent in similar cases" imposing a
punishment less severe than dismissal was shown to exist.  The
best the employee could do was to look for distinctions -
sometimes rather thin ones - between this case and the many
others in which the Authority dismissed employees who assaulted
customers.  The arbitrator was clearly wrong to find that the
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Authority's punishment of this employee was "clearly excessive in
light of the employee's record and past precedent in similar
cases."
Because the arbitrator exceeded a limitation that the
parties placed on his power, I would affirm the Appellate
Division's order vacating the award.
*   *   *   *   *   *   *   *   *   *   *   *   *   *   *   *   *
Order reversed, with costs, and petition dismissed.  Opinion by
Chief Judge Lippman.  Judges Ciparick, Graffeo, Pigott and Jones
concur.  Judge Smith dissents and votes to affirm in an opinion
in which Judge Read concurs.
Decided February 18, 2010