Case Title: Cedar Fair, L.P. v. Falfas

Citation: 2014-Ohio-3943

Docket Number: 2013-0890

State: ohio

Court: Ohio Supreme Court

Date: 2014-09-18T00:00:00Z

Document:
[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as 
Cedar Fair, L.P. v. Falfas, Slip Opinion No. 2014-Ohio-3943.] 
 
 
 
NOTICE 
This slip opinion is subject to formal revision before it is published in 
an advance sheet of the Ohio Official Reports.  Readers are requested 
to promptly notify the Reporter of Decisions, Supreme Court of Ohio, 
65 South Front Street, Columbus, Ohio 43215, of any typographical or 
other formal errors in the opinion, in order that corrections may be 
made before the opinion is published. 
 
SLIP OPINION NO. 2014-OHIO-3943 
CEDAR FAIR, L.P., APPELLANT, v. FALFAS, APPELLEE. 
[Until this opinion appears in the Ohio Official Reports advance sheets, it 
may be cited as Cedar Fair, L.P. v. Falfas, Slip Opinion No. 2014-Ohio-3943.] 
Arbitration—R.C. 
2711.10(D)—Vacation 
of 
arbitration 
award—Specific 
performance not an available remedy for breach of employment contract 
unless explicitly provided for in contract or by applicable statute. 
(No. 2013-0890—Submitted April 9, 2014—Decided September 18, 2014.) 
APPEAL from the Court of Appeals for Erie County, 
No. E-12-015, 2013-Ohio-1590. 
____________________ 
SYLLABUS OF THE COURT 
Specific performance is not an available remedy for breach of an employment 
contract unless it is explicitly provided for in the contract or by an 
applicable statute.  (Masetta v. Natl. Bronze & Aluminum Foundry Co., 
159 Ohio St. 306, 112 N.E.2d 15 (1953), applied.) 
____________________ 
SUPREME COURT OF OHIO 
2 
 
 
O’NEILL, J. 
{¶ 1} In this case, we review the propriety of an arbitration award of 
reinstatement as a remedy for an employer’s breach of an employment agreement. 
{¶ 2} In 2005 plaintiff-appellee, Jacob Falfas, was promoted to chief 
operating officer of defendant-appellant, Cedar Fair, L.P., where he had been 
continuously employed for nearly 35 years.  The terms of Falfas’s relationship 
with Cedar Fair were detailed in a written employment agreement signed by both 
parties.  In his role as chief operating officer, Falfas reported directly to Cedar 
Fair’s chairman of the board, president, and chief executive officer, Richard 
Kinzel, and was responsible for—among other duties—negotiating contracts for 
and purchasing shows that were performed in Cedar Fair’s amusement parks.  In 
June 2010, Falfas became aware that Kinzel was unhappy with the contract and 
budgeting for one of those shows, and Kinzel’s dissatisfaction led to a 94-second 
phone call between the two men on the afternoon of June 10, 2010.  After that 
phone call, Falfas believed that Kinzel had fired him, but Kinzel believed that 
Falfas had resigned. 
{¶ 3} Falfas’s termination ultimately became the subject of binding 
arbitration, and the arbitration panel found that Falfas had not resigned but had 
been terminated for reasons other than cause.  The panel went on to conclude that 
“equitable relief is needed to restore the parties to the positions that they held 
prior to the breach of the Employment Agreement,” and, despite the fact that 
nearly eight months had passed since Falfas’s employment had ended, the 
arbitration panel ordered Cedar Fair to reinstate Falfas “to the position he held 
prior to his wrongful termination.” 
{¶ 4} It is the propriety of this order of reinstatement that we address 
today.  Cedar Fair appealed the arbitration decision to the Erie County Court of 
Common Pleas.  The trial court concluded that the arbitration panel’s order of 
reinstatement went beyond the authority the panel was granted under the 
January Term, 2014 
3 
 
employment contract.  The Sixth District Court of Appeals reversed that decision, 
concluding that the arbitration panel had the authority to order Falfas’s 
reinstatement under the contract and that reinstatement was consistent with Ohio 
law.  Cedar Fair appealed to this court, and we accepted jurisdiction to determine 
whether an arbitration panel’s order of reinstatement of a terminated employee is 
an available remedy for an employer’s breach of contract.  136 Ohio St.3d 1491, 
2013-Ohio-4140, 994 N.E.2d 462.  We conclude that specific performance is not 
an available remedy for breach of an employment contract unless it is explicitly 
provided for in the contract or by an applicable statute. 
{¶ 5} The authority of an arbitrator to interpret and enforce a contract is 
drawn from the contract itself, and for this reason we have held that “[a]n 
arbitrator’s authority is limited to that granted him by the contracting parties, and 
does not extend to the determination of the wisdom or legality of the bargain.”  
Goodyear Tire & Rubber Co. v. Local Union No. 200, United Rubber, Cork, 
Linoleum & Plastic Workers of Am., 42 Ohio St.2d 516, 519, 330 N.E.2d 703 
(1975).  The Ohio statute governing when a court may vacate an arbitrator’s 
award provides that “the court of common pleas shall make an order vacating the 
award upon the application of any party to the arbitration” if the award was the 
product of corruption, fraud, or undue means; if any arbitrator was partial or 
corrupt; if the arbitrators were guilty of misconduct or misbehavior; or if “[t]he 
arbitrators exceeded their powers.”  R.C. 2711.10(A) through (D).  This statute is 
substantively equivalent to the analogous provisions of the Federal Arbitration 
Act, and we have often used federal law in aid of our application of the statute.  
Compare R.C. 2711.10 with 9 U.S.C. 10(a)(1) through (4); see Goodyear Tire & 
Rubber Co. at 520, 522-523 (quoting federal case law while applying R.C. 
2711.10).  And we have held that the statutory authority of courts to vacate an 
arbitrator’s award is extremely limited.  See, e.g., Assn. of Cleveland Fire 
Fighters, Local 93 of the Internatl. Assn. of Fire Fighters v. Cleveland, 99 Ohio 
SUPREME COURT OF OHIO 
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St.3d 476, 2003-Ohio-4278, 793 N.E.2d 484, ¶ 13.  “Were the arbitrator’s 
decision to be subject to reversal because a reviewing court disagreed with 
findings of fact or with an interpretation of the contract, arbitration would become 
only an added proceeding and expense prior to final judicial determination.  This 
would defeat the bargain made by the parties * * *.”  Goodyear Tire & Rubber 
Co. at 520. 
{¶ 6} So long as arbitrators act within the scope of the contract, they 
have great latitude in issuing a decision.  An arbitrator’s improper determination 
of the facts or misinterpretation of the contract does not provide a basis for 
reversal of an award by a reviewing court, because “[i]t is not enough * * * to 
show that the [arbitrator] committed an error—or even a serious error.”  Stolt–
Nielsen, S.A. v. AnimalFeeds Internatl. Corp., 559 U.S. 662, 671, 130 S.Ct. 1758, 
176 L.Ed.2d 605 (2010).  Moreover, we have held that arbitrators have “broad 
authority to fashion a remedy, even if the remedy contemplated is not explicitly 
mentioned” in the applicable contract.  Queen City Lodge No. 69, Fraternal 
Order of Police, Hamilton Cty., Ohio, Inc. v. Cincinnati, 63 Ohio St.3d 403, 407, 
588 N.E.2d 802 (1992). 
{¶ 7} Notwithstanding 
these 
principles, 
under 
R.C. 
2711.10(D) 
arbitrators can exceed their powers by going beyond the authority provided by the 
bargained-for agreement or by going beyond their contractual authority to craft a 
remedy under the law.  See, e.g., Oxford Health Plans, L.L.C. v. Sutter, ___ U.S. 
___, 133 S.Ct. 2064, 2068, 186 L.Ed.2d 113 (2013) (analyzing 9 U.S.C. 10(a)(4) 
of the Federal Arbitration Act).  Arbitrators act within their authority to craft an 
award so long as the award “draws its essence” from the contract—that is, “when 
there is a rational nexus between the agreement and the award, and where the 
award is not arbitrary, capricious or unlawful.”  Mahoning Cty. Bd. of Mental 
Retardation & Dev. Disabilities v. Mahoning Cty. TMR Edn. Assn., 22 Ohio St.3d 
80, 488 N.E.2d 872 (1986), paragraph one of the syllabus.  Accord Oxford Health 
January Term, 2014 
5 
 
Plans at 2068.  So long as there is a good-faith argument that an arbitrator’s 
award is authorized by the contract that provides the arbitrator’s authority, the 
award is within the arbitrator’s power, but an award “departs from the essence of 
a [contract] when: (1) the award conflicts with the express terms of the agreement, 
and/or (2) the award is without rational support or cannot be rationally derived 
from the terms of the agreement.”  Ohio Office of Collective Bargaining v. Ohio 
Civ. Serv. Emps. Assn., Local 11, AFSCME, AFL-CIO, 59 Ohio St.3d 177, 572 
N.E.2d 71 (1991), syllabus.  And finally, we note that it is well settled that “ ‘an 
arbitrator is confined to interpretation and application of the [contract]; he does 
not sit to dispense his own brand of industrial justice.’ ”  Id. at 180, quoting 
United Steelworkers of Am. v. Ent. Wheel & Car Corp., 363 U.S. 593, 597, 80 
S.Ct. 1358, 4 L.Ed.2d 1424 (1960). 
{¶ 8} In short, if it can be fairly argued that the arbitrators’ award of 
reinstatement to Falfas was contemplated by the contract at issue here and that the 
law arguably authorizes the award, the reinstatement should be upheld.  These are 
quite deferential standards, but after analysis, we are compelled to conclude that 
by ordering Cedar Fair to reinstate Falfas, the arbitration panel exceeded its 
powers. 
{¶ 9} Cedar Fair’s employment agreement with Falfas contains four 
separate sections that are relevant to whether the agreement gave the arbitration 
panel the power to order Falfas’s reinstatement: 
 
7. 
Termination by Cedar Fair Other Than for Cause. 
(a) If, other than pursuant to Section 10 or Section 12 
hereof, Cedar Fair shall terminate Executive’s employment 
(including by written notice of intent, pursuant to Section 2 hereof, 
not to renew this Agreement), then [Executive shall receive his 
base salary for either one year or the remaining employment term, 
SUPREME COURT OF OHIO 
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whichever is longer, and shall receive certain continuing benefits 
as specifically detailed in this Section]. 
All other benefits provided by Cedar Fair shall end as of the last 
day of Executive’s active employment. 
* * * 
10. 
Termination for Cause. 
 
(a)  Cedar Fair may terminate Executive’s employment for 
Cause.  * * * 
(b)  If Executive’s employment shall be terminated for 
Cause, Cedar Fair shall pay Executive, in a lump sum, on the 
twentieth (20th) business day following the date of termination for 
Cause, his Base Salary through the date of his termination. 
(c)  Cedar Fair shall have no further obligations to 
Executive under this Agreement. 
11. 
Termination By Resignation. 
In the event Executive resigns his employment, all benefits 
and compensation shall cease on the last day of Executive’s active 
employment with Cedar Fair. 
* * * 
19. 
Arbitration. 
* * * 
(c)  * * * The arbitration panel shall have authority to 
award any remedy or relief that an Ohio or federal court in Ohio 
could grant in conformity with applicable law on the basis of the 
claims actually made in the arbitration.  The arbitration panel shall 
not have the authority either to abridge or change substantive rights 
available under the existing law. 
 
January Term, 2014 
7 
 
(Boldface and underlining sic.) 
{¶ 10} The evidence presented at the arbitration hearing focused almost 
entirely on whether Falfas had resigned his position with Cedar Fair.  Based on 
that evidence, Cedar Fair argued that Section 11 controlled and that Falfas was 
not entitled to any kind of postemployment compensation, because he had 
resigned.  Falfas, by contrast, argued that he had been terminated without cause 
and that he was entitled to either reinstatement under Section 19(c) of the 
contract, with full continuing compensation and benefits as if he had not been 
terminated, or to compensation and benefits according to Section 7 of the 
contract.  The parties agreed that Falfas had not been terminated for cause and 
therefore that Section 10 of the contract was not controlling. 
{¶ 11} The arbitration panel concluded that “Falfas was terminated for 
reasons other than cause”, and that “the facts fail to establish resignation.”  Based 
on this finding, Cedar Fair argues that the arbitration panel’s power was limited to 
awarding Falfas the period of continuing compensation and benefits he was 
entitled to receive under Section 7 of the contract, which by its plain terms is a 
liquidated-damages provision in case of termination other than for cause.  In 
support of this view, Cedar Fair points out that Section 2 of the employment 
agreement provided that “Cedar Fair shall have the right to terminate this 
Agreement at any time, subject to the obligations to provide the benefits and make 
the payments provided herein.”  But Falfas argues that because the panel also 
determined that “equitable relief is needed to restore the parties to the positions 
that they held prior to the breach of the Employment Agreement,” and that 
because the panel was authorized under Section 19(c) of the contract “to award 
any remedy or relief that an Ohio or federal court in Ohio could grant in 
conformity with applicable law,” the award of reinstatement was proper.  Thus, 
the issue is whether the arbitration panel could conclude in good faith that specific 
SUPREME COURT OF OHIO 
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performance in the form of reinstatement was an available legal remedy under the 
law and therefore under Section 19(c) of the contract. 
{¶ 12} Framed this way, the question suggests its own answer.  It is hardly 
controversial to recognize that an order of specific performance is rarely an 
appropriate remedy for breach of an employment agreement.  It is, for example, 
common for first-year law students to review the case of Lumley v. Wagner, 42 
Eng.Rep. 687 (1852), in which the court observed that it lacked the power to 
order a singer who had contracted to perform at the plaintiff’s theater to 
specifically complete her contract.  Id. at 693.  Ohio has long followed the same 
rule.  See Port Clinton RR. Co. v. Cleveland & Toledo RR. Co., 13 Ohio St. 544, 
550 (1862) (“In the case of a contract for personal service, it may be that, on a 
refusal to perform the contract, an action for damages would not afford adequate 
relief, and yet it is clear that a court of equity will not attempt to enforce 
specifically such a contract”).  Accord Hoffman Candy & Ice Cream Co. v. Dept. 
of Liquor Control, 154 Ohio St. 357, 96 N.E.2d 203 (1950), paragraph three of the 
syllabus. 
{¶ 13} In Masetta v. Natl. Bronze & Aluminum Foundry Co., 159 Ohio St. 
306, 112 N.E.2d 15 (1953), paragraph two of the syllabus, this court held that “[a] 
court of equity will not, by means of mandatory injunction, decree specific 
performance of a labor contract existing between an employer and its employees 
so as to require the employer to continue any such employee in its service or to 
rehire such employee if discharged.”  Masetta is squarely within the mainstream 
on this question; surveying the cases related to the issue, the authors of a 
frequently cited treatise have observed that “[o]n occasion an employee has 
sought specific performance of an employment contract against an employer.  
Such relief has almost invariably been denied.  Such enforcement * * * would 
involve difficulty of supervision and, often, forc[e] the continuance of a 
January Term, 2014 
9 
 
distasteful personal relationship.”  (Footnote omitted.)  Calamari & Perillo, The 
Law of Contracts, Section 16.5, at 618 (4th Ed.1998). 
{¶ 14} To be fair, there are some exceptions to this general rule.  Most 
notably, collective-bargaining agreements, civil-service laws, and civil-rights laws 
have all endorsed reinstatement as a remedy for wrongful termination of 
employment.  See, e.g., 29 U.S.C. 626(b) (“In any action brought to enforce [the 
Age Discrimination in Employment Act] the court shall have jurisdiction to grant 
such legal or equitable relief as may be appropriate to effectuate the purposes of 
this chapter, including without limitation judgments compelling employment, 
reinstatement or promotion”).  See also, e.g., R.C. 4112.05(G)(1) (including 
“reinstatement” as an available remedy if the Ohio Civil Rights Commission 
determines that a respondent has engaged in an unlawful discriminatory practice).  
Recognizing these developments, this court has held that “specific performance of 
a reinstatement provision in a settlement agreement is appropriate when * * * the 
settlement agreement provides for reinstatement in clear and unambiguous terms 
and when the settlement promise of reinstatement is given in exchange for the 
relinquishment of a statutorily-created right to reinstatement.”  (Emphasis 
added.)  State ex rel Wright v. Weyandt, 50 Ohio St.2d 194, 199, 363 N.E.2d 1387 
(1977).  In Wright, this court held that a clear bargained-for promise of 
reinstatement in an agreement could be enforced by specific performance.  But 
even in light of Wright, the general rule forbidding compulsory performance 
survives—those exceptions discussed above would make no sense if it were 
otherwise.  In short, unless a statute or the employment contract says otherwise, 
the rule in Ohio remains that specific performance is not an available remedy for 
breach of an employment contract. 
{¶ 15} It is at best a strained conclusion that Section 19(c), which 
authorizes the arbitration panel to award “any remedy or relief that an Ohio or 
federal court in Ohio could grant” is sufficient to authorize reinstatement “in clear 
SUPREME COURT OF OHIO 
10 
 
and unambiguous terms,” as did the settlement agreement in Wright.  In order to 
maintain his argument that reinstatement is an available remedy, Falfas relies—in 
large part—on a single phrase from this court’s decision in Worrell v. Multipress, 
Inc., 45 Ohio St.3d 241, 543 N.E.2d 1277 (1989).  In Worrell we noted in passing 
that “front pay is an equitable remedy designed to financially compensate 
employees where ‘reinstatement’ of the employee would be impractical or 
inadequate.  In such circumstances an award of front pay enables the court to 
make the injured party whole, although reinstatement is the preferred remedy.”  
Id. at 246.  Falfas argues that because we recognized reinstatement as “the 
preferred remedy” in Worrell, the arbitration panel’s award of reinstatement was a 
“remedy or relief that an Ohio or federal court in Ohio could grant in conformity 
with applicable law,” and therefore it should be affirmed. 
{¶ 16} But this argument relies on reading the quoted words in isolation 
from the remainder of the opinion and completely out of the context in which 
those words appear: as dictum grounded in discussing the remedies available 
under the Age Discrimination in Employment Act of 1967 (“ADEA”).  The 
Worrell opinion directly supported the sentence at issue by citing Cassino v. 
Reichhold Chems., Inc., 817 F.2d 1338 (9th Cir.1987).  In Cassino, the court, after 
quoting 29 U.S.C. 626(b) and its specific authorization of “reinstatement” as one 
avenue of relief, stated that while “reinstatement is the preferred remedy in these 
cases, it may not be feasible where the relationship is hostile or no position is 
available due to a reduction in force.”  (Emphasis added.)  Id. at 1346.  Worrell 
does not even begin to suggest that reinstatement to employment is the “preferred 
remedy” in all personal-services-contract disputes, which would be a manifestly 
incorrect understanding of the law.  The opinion merely notes, far more 
prosaically, that reinstatement is a statutorily preferred remedy for wrongful 
dismissal under the ADEA. 
January Term, 2014 
11 
 
{¶ 17} Falfas’s reading of Worrell would have the statutory exception 
favoring reinstatement in employment-discrimination cases swallow the general 
common-law rule forbidding reinstatement in employment cases.  But Worrell 
itself actually rejects this argument, observing as it does that “the usual remedy in 
breach of contract cases for wrongful discharge is to pay the injured party the 
difference between any wages due under the contract from the date of discharge 
until the contract term expires.”  Id. at 246.  Moreover, the actual holding of 
Worrell, ironically, more closely supports the remedy advocated by Cedar Fair.  
See id. at 247 (“We hold that, as a result of breach of an employment contract 
where an employee has been wrongfully discharged, front pay, or lost future 
wages, may be awarded as compensation between the date of discharge and 
reemployment in a position of equal or similar status”).  In short, it cannot be 
fairly argued that Falfas’s interpretation of Worrell is even reasonable, let alone 
that it is a correct statement of the law—the only way this argument could work at 
all is to ignore everything other than the words “preferred remedy.”  We simply 
cannot hold that the arbitration panel acted within its authority in disregarding the 
general rule against reinstatement when the employment agreement here lacks the 
“clear and unambiguous terms” authorizing reinstatement that were present in 
Wright. 
{¶ 18} We finally observe that Falfas’s reading of Section 19(c) of the 
agreement is completely undermined by the existence of Sections 7, 10, and 11, 
which address the generally understood possibilities here: termination without 
cause, termination for cause, and resignation.  The arbitration panel specifically 
found that Falfas was terminated without cause, and therefore, as the trial court 
concluded, Falfas was entitled to “his back pay and other benefits he enjoyed 
* * * as if the employment relationship had not been severed,” as outlined in 
Section 7 of the agreement.  Section 7, as Cedar Fair has argued to this court, 
quite clearly includes a liquidated-damages provision designed to set forth the 
SUPREME COURT OF OHIO 
12 
 
compensation and benefits to which Falfas is entitled on account of Cedar Fair’s 
decision to terminate his employment contract without cause.  The record before 
us demonstrates that the parties to the contract envisioned precisely what 
happened here.  Nearly eight months passed between Falfas’s termination and the 
arbitration panel’s award.  How could a large business entity like Cedar Fair 
properly function if an arbitration panel was authorized to force it to reemploy an 
unwanted senior officer after it had obviously moved on?  Why would any such 
entity or employee agree to give an arbitration panel the power to cause such 
disruption?  And why should the broad language in Section 19(c) be interpreted to 
allow such a result when Section 7, by implication, forbids it? 
{¶ 19} For all these reasons, we hold that specific performance is not an 
available remedy for breach of an employment contract unless it is explicitly 
provided for in the contract or by an applicable statute and that the arbitration 
panel in this case exceeded its authority by holding otherwise.  Because the fact-
finder determined that Falfas was terminated for reasons other than for cause, he 
is entitled to his base salary for either one year or his remaining employment 
term, whichever is longer.  That matter and other concerns are to be addressed by 
the trial court upon remand.  But the contract clearly does not entitle him to 
reinstatement.  We accordingly reverse the judgment of the court of appeals and 
remand this case to the Erie County Court of Common Pleas for further 
proceedings. 
Judgment reversed 
and cause remanded. 
O’CONNOR, C.J., and PFEIFER, O’DONNELL, LANZINGER, KENNEDY, and 
FRENCH, JJ., concur. 
____________________ 
January Term, 2014 
13 
 
Organ Cole & Stock, L.L.P., Douglas R. Cole, Erik J. Clark, and Joshua 
M. Feasel; and Murray & Murray Co., L.P.A., Dennis E. Murray Jr., and Dennis 
E. Murray Sr., for appellant. 
Wickens, Herzer, Panza, Cook & Batista Co., Richard D. Panza, William 
F. Kolis, Joseph E. Cirigliano, and Matthew W. Nakon, for appellee. 
_________________________