Title: Baltimore County Fraternal Order of Police Lodge v. Baltimore County

State: maryland

Issuer: Maryland Supreme Court

Document:

HEADNOTE:
Baltimore County Fraternal Order of Police Lodge No. 4 v. Baltimore County, Maryland,
No. 3, September Term, 2012, Opinion by Adkins, J. 
ARBITRATION–ARBITRABILITY OF DISPUTES ARISING UNDER A COLLECTIVE
BARGAINING AGREEMENT BUT AFTER ITS EXPIRATION– The fact that a collective
bargaining agreement has expired does not mean there can be no duty to arbitrate disputes
arising out of that agreement, where the agreement contains a broad arbitration clause and
where the rights under the agreement accrued or vested during the life of the agreement. 
ARBITRATION–ARBITRABILITY–When deciding the issue of arbitrability of a dispute
requires interpretation of the underlying agreement and necessitates consideration of the
merits of the dispute, the arbitrability decision initially is with the arbitrator, not the courts.
Circuit Court for Baltimore County
Case No. 03-C-08-008643
IN THE COURT OF APPEALS
OF MARYLAND
No. 3
September Term, 2012
                                                                             
BALTIMORE COUNTY FRATERNAL
ORDER OF POLICE LODGE NO. 4
v.
BALTIMORE COUNTY, MARYLAND
                                                                             
Bell, C.J.,
Harrell
Battaglia
Greene
Adkins
Barbera
McDonald,
JJ.
                                                                             
Opinion by Adkins, J.
                                                                             
Filed:    November 19, 2012 
1We say “seemingly” because our analysis reveals that these two issues are intricately
interrelated. 
The central issue in this appeal is whether a duty to arbitrate may survive expiration
of the agreement that contains the arbitration clause.  The seemingly1 peripheral issue is who
decides this question initially: the arbitrator or the court.  An additional consideration lurking
beneath the surface of these two questions, but necessary to their resolution, is when a
dispute may be said to arise “under” an expired agreement so as to be arbitrable despite the
agreement’s expiration.  
We now place these concepts into the context of this case.  A collective-bargaining
agreement between Baltimore County and Baltimore County Fraternal Order of Police,
Lodge 4 (“FOP”) contained an arbitration clause and a retiree health-insurance provision.
FOP believed the provision locked in place the health-insurance subsidy, as it existed at the
time of an officer’s retirement.  After the agreement expired and the County decreased the
health-insurance subsidy, FOP initiated arbitration.  The County protested, arguing that it had
no duty to arbitrate because the collective-bargaining agreement had expired.  The County
also maintained that the health-insurance subsidy was not locked in place but was subject to
change from year to year.  FOP was successful in arbitration and on appeal before the circuit
court, but the Court of Special Appeals vacated the arbitration award.  FOP presents the
following issues for our review: 
1. Under Maryland’s common law, should an arbitration
clause in a collective bargaining agreement be enforced after
that agreement’s expiration when an otherwise arbitrable
grievance is presented concerning vested rights that arise out of
the collective bargaining agreement? 
2Baltimore County Fraternal Order of Police (“FOP”) also poses a third question,
stemming from the Court of Special Appeals’ ruling:  “Did the [the Court of Special
Appeals] err in holding that—in the Arbitration Opinion and Award at issue in this
litigation—the arbitrator failed to address the question of whether the arbitration clause had
expired?”  Our opinion resolves this issue in the course of addressing the County’s arguments
for vacating the arbitration award.
3There was, however, a four-year Memorandum of Understanding (“MOU”) from July
1, 1987 to June 30, 1991, and no MOU between July 1, 1991 and June 30, 1994.
2
2. Does the common law of Maryland require the court
or the arbitrator to determine the arbitrability of a postexpiration
grievance arising out of a collective bargaining agreement
containing an arbitration clause?2 
We shall hold that an arbitration clause may survive the expiration of a collective
bargaining agreement when it concerns rights that vested during the life of the agreement.
We shall also hold that, when deciding the issue of arbitrability requires interpretation of the
underlying agreement and consideration of the merits of the dispute, the issue of arbitrability
should be initially determined by the arbitrator.  The Circuit Court for Baltimore County
properly granted summary judgment in FOP’s favor.  We thus reverse the Court of Special
Appeals’ judgment. 
FACTS AND LEGAL PROCEEDINGS 
Baltimore County government employs approximately 8,000 employees.  FOP has
represented the County’s 1,700 police officers for approximately 20 years.  The County and
FOP have been parties to a succession of one-year3 collective bargaining agreements, called
memoranda of understanding (“MOU”).  These MOUs set forth the negotiated terms of
3
conditions of employment for active and retired police officers.  All MOUs contained an
article on the grievance procedure, which provided—among other things—that all
“grievances,” including “[a]ny dispute concerning the application or interpretation of the
terms of this [MOU]” that are not settled internally “shall be subject to binding arbitration.”
1992 Through 1995: No Mention of Health Insurance in MOUs
In 1991, Baltimore County instituted a Retirement Incentive Program.  As part of the
Program, the County agreed to pay 90 percent of retirees’ health insurance premium, while
the retirees would pay the remaining 10 percent.  Maintenance of this 90/10 split, however,
was guaranteed only to officers who retired on or before January 31, 1992.  The Incentive
Program also made clear that employees retiring on or after February 1, 1992 would receive
the same subsidy as active employees and that the subsidy could go up or down subject to
future labor negotiations.
From February 1, 1992 to July 1, 1995, the MOUs made no reference to retiree health
insurance.  Officers who retired during that time received the same health-insurance
premium split that active officers were receiving at that time.
1995 Through June 30, 2007: Retiree Health Insurance Provision 
This changed with the 1995 negotiations for a new collective bargaining agreement,
when FOP was able to negotiate the following health-insurance provision to be included in
the MOU: 
Section 7.13: Retiree Health Insurance-The County shall
provide the same health insurance benefits . . . to retirees under
the age of sixty-five (65) as it does for active employees, at the
4Additionally, the 1995 MOU provided that this split was to apply retroactively to
officers who retired between February 1, 1992 and July 1, 1995, which was the FY 1995
MOU’s effective date.
5The only change to the Retiree Health Insurance provision was the language
concerning the retroactive application of the provision to retirees who retired between 1992
and 1995.  That language was taken out in 2003.
6The bargaining agent for FOP and other County unions, Health Care Review
Committee (“HCRC”), agreed to this proposed change, but the FOP representative voted
against it.  The HCRC has been the collective bargaining agent on health care issues for
various County unions, including the FOP, since 1987.
4
time . . . the employees retire[].  The health insurance subsidy
at the time of retirement will remain in effect until the retiree or
the retiree’s surviving beneficiary reaches age sixty-five (65).4
This language remained in subsequent MOUs until 2004,5 when the reference to “age
sixty-five” was changed to eligibility for “Medicare”:  “The health insurance subsidy in
place at the time of retirement shall remain in effect until the retiree becomes eligible for
Medicare.”  Between February 1, 1992 and June 30, 2007, the health-insurance subsidy for
active employees—and therefore retirees—remained at 85 percent.
2007 Decrease in Health-Insurance Subsidy and FOP’s Grievance
In 2007, as part of its effort “to control escalating health care costs for County
employees,” the County negotiated a phased-in decrease in the health-insurance premium
subsidy from 85 to 80 percent, which was to take effect gradually over the next five years.6
On July 1, 2007, the County decreased the health-insurance premium split from 85/15 to
84/16 for retirees, as well active members.  
7On July 9, 2007, FOP also filed  an Unfair Labor Practice Complaint challenging the
County’s refusal to bargain with it.  That complaint was dismissed on the ground that HCRC
was the bargaining agent for the FOP, and the County had not committed an unfair labor
practice by refusing to negotiate with FOP directly after HCRC had approved of the change.
8In FOP’s view, “[o]nce an employee retires, their health insurance subsidy is locked
in.”  
5
On September 14, the FOP filed a class grievance7 on behalf of the officers who
retired from February 1, 1992 to August 31, 2007, alleging that the 85/15 health-insurance
subsidy split was a “lifetime promise” to those retirees, and that, as a result, those retirees
were not subject to the decreased premium split.8  On November 6, 2007, Labor
Commissioner George Gay conducted a Grievance Appeal Hearing, and on November 17,
he denied FOP’s grievance.  Gay believed that MOUs are “one-year agreements which are
re-opened and renegotiated annually,” and which, unlike pension benefits, do not create
“vested rights.”
FOP filed for arbitration.  The arbitrator granted FOP’s grievance, concluding that
it was arbitrable even though the MOU had expired because the 85/15 health-insurance
premium split was a “vested right” that “was not, and could not be, changed by the
[subsequent] negotiations.”  Thus, the arbitrator ordered that the County (1) rescind the
modification as applied to police officers who retired from 1995 to June 30, 2007, (2)
continue the 85/15 split until those retirees became eligible for Medicare, and (3) reimburse
them for wrongful deductions. 
The County filed a Complaint to Vacate the Arbitration Award in the Circuit Court
9The Court of Special Appeals held that the arbitrator’s Opinion and Award failed to
consider a required factor: whether “the arbitration clause itself had expired.”  Reasoning
that “‘[v]ested’ rights were necessary for arbitration, but so was the arbitration clause’s
survival despite the MOU’s expiration,” the court held that the Arbitration Award “should
have been vacated.”  Notably, neither party made that argument before the Circuit Court or
the Court of Special Appeals. 
6
for Baltimore County.  It argued, inter alia, that (1) the arbitrator lacked jurisdiction and
exceeded his authority because the MOU containing the arbitration clause had expired, (2)
“there was no agreement to arbitrate” because the MOU had expired, and (3) the award
“involve[d] mistakes so gross as to constitute manifest injustice.”  The Circuit Court
disagreed, however, and granted summary judgment in FOP’s favor, refusing to vacate the
Arbitration Award.
The County appealed.  The Court of Special Appeals reversed the Circuit Court’s
grant of summary judgment in FOP’s favor,9 and FOP filed a petition for certiorari, which
we granted.  Balt. Cnty. Fraternal Order of Police, Lodge No. 4 v. Balt. Cnty., 425 Md. 395,
41 A.3d 570 (2011). 
DISCUSSION 
The first issue before us is whether an arbitration clause contained in an expired MOU
survived the expiration of that MOU, making the dispute over the health-insurance premium
split arbitrable.  FOP argues that—even though the MOU expired—the County’s decrease
in health-insurance subsidy was an arbitrable grievance because “absent specific contractual
evidence to the contrary, [a broad] arbitration clause survives expiration of the agreement and
7
requires that disputes arising out of it, but after expiration of, the underlying agreement are
arbitrable.”  The County argues the opposite:  the arbitration clause was narrow, “FOP’s
grievance was based upon an MOU that no longer existed,” and therefore the arbitrator had
“no power, authority, or jurisdiction” to resolve the dispute.  The parties also ask us to decide
who determines this very issue: the arbitrator or the court. 
I.
Arbitrability of a Grievance Arising After Expiration 
of a Collective-Bargaining Agreement
In deciding whether an arbitration clause may survive expiration of the agreement that
gave it existence, the arbitrator in this case relied extensively on two United States Supreme
Court cases:  Nolde Bros. v. Bakery & Confectionery Workers Union, 430 U.S. 243, 97 S.
Ct. 1067 (1977) and Litton Fin. Printing Div. v. NLRB, 501 U.S. 190, 111 S. Ct. 2215 (1991).
FOP and the County have also spent a considerable amount of time in their briefs discussing
these cases.  We accept the parties’ invitation and examine Nolde and Litton.
A. The Vesting Principles of Nolde and Litton
Both Nolde and Litton addressed arbitrability of a grievance arising after expiration
of a collective-bargaining agreement.  In Nolde, the agreement had a broad arbitration clause
and provided for severance pay upon employment termination.  430 U.S. at 245, 97 S. Ct.
at 1068–69.  After the agreement’s expiration, the bakery closed and refused to pay any
severance.  It maintained that “since severance pay was a creation of the collective-
bargaining agreement, its substantive obligation to provide such benefits terminated with the
10In reaching that conclusion, the Court observed:  “the parties’ obligations under their
arbitration clause survived contract termination when the dispute was over an obligation
arguably created by the expired agreement.”  Nolde Bros. v. Bakery & Confectionery
Workers Union, 430 U.S. 243, 252, 97 S. Ct. 1067, 1072 (1977) (citing John Wiley & Sons
v. Livingston, 376 U.S. 543, 555, 84 S. Ct. 909, 917 (1964)).  The Court went on to hold that
“where the dispute is over a provision of the expired agreement, the presumptions favoring
arbitrability must be negated or by clear implication.”  Id. at 255, 97 S. Ct. at 1074.  The
Court explained: 
The parties must be deemed to have been conscious of [the]
8
Union’s unilateral cancellation of the contract.”  Id. at 249, 97 S. Ct. at 1071.  The bakery
also resisted arbitration, arguing that “the duty to arbitrate . . . must necessarily expire with
the collective-bargaining contract that brought it into existence.”  Id. at 250, 97 S. Ct. at
1071.  The Supreme Court disagreed:  the “termination of a collective-bargaining agreement
[does not] automatically extinguish[] a party’s duty to arbitrate grievances arising under the
contract.”  Id. at 251, 97 S. Ct. at 1071.  
If that were true, the Court explained, there could be no arbitration of a dispute that
“arose during the life of the contract but arbitration proceedings had not begun before
termination” or if “arbitration processes began but were not completed, during the contract’s
term.”  Id., 97 S. Ct. at 1072.  Yet, in both of these instances, “the parties’ contractual
obligation to resolve such a dispute in an arbitral, rather than a judicial forum” would
continue to exist even after the contract’s expiration.  Id.  Thus, even though the dispute
arose “after” the contract’s expiration, because the parties’ arguments were “based on their
differing perceptions of a [contract’s] provision,” the dispute arose “under” that contract, and
as such, was arbitrable.10  Id. at 249, 255, 97 S. Ct. at 1071, 1074. 
policy [favoring arbitration].  Consequently, the parties’ failure
to exclude from arbitrability contract disputes arising after
termination, far from manifesting an intent to have arbitration
obligations cease with the agreement, affords a basis for
concluding that they intended to arbitrate all grievances arising
out of the contractual relationship. 
Id. 
9
Almost two decades later, in Litton, the Court reaffirmed that “[w]e presume as a
matter of contract interpretation that the parties did not intend a pivotal dispute resolution
provision to terminate for all purposes upon the expiration of the agreement.”  501 U.S. at
208, 111 S. Ct. at 2226.  The Court further delineated three circumstances in which a post-
expiration grievance may be considered to arise under the expired contract: (1) where the
grievance “involves facts and occurrences that arose before expiration, [2] where an action
taken after expiration infringes a right that accrued or vested under the agreement, or [3]
where, under normal principles of contract interpretation, the disputed contractual right
survives expiration of the remainder of the agreement.”  Id. at 206, 111 S. Ct. at 2225.  
B.  The Applicability of the Nolde/Litton Vesting Principles in Maryland
FOP urges us to adopt Nolde’s reasoning, arguing that Nolde is directly on point and
in accordance with our decisions and the decisions of other Maryland courts.  It maintains
that adopting Nolde’s vesting principles would be consistent with our treatment of broad
arbitration clauses as encompassing any and all disputes not specifically excluded, NCS
Contractors, Inc. v. Borders, 317 Md. 394, 403, 564 A.2d 408, 412 (1989), and as severable
11For this proposition, the County cites Frank Elkouri & Edna Asper Elkouri, How
Arbitration Works 134 (6th Ed. 2003), who wrote: “The majority of federal courts have read
Nolde narrowly, holding that for a grievance to be arbitrable, after the expiration of the
contract, it must involve either rights that have accrued or vested during the term of the
agreement, or disputes that arose under the agreement while it was still in effect.”  We are
of the opinion that the vagueness of Nolde concerning whether a dispute arose “under” the
expired agreement—if any—was cured by Litton, which set forth the three situations when
contract disputes arising after the agreement’s expiration may still be arbitrable.  See Nolde,
430 U.S. at 249, 97 S. Ct. at 1071; Litton Fin. Printing Div. v. NLRB, 501 U.S. 190, 206, 111
S. Ct. 2215, 2225 (1991).
10
from the rest of the agreement, Holmes v. Coverall N. Am., 336 Md. 534, 547, 649 A.2d 365,
371 (1994).  FOP also directs our attention to several cases in which this Court and the Court
of Special Appeals have looked for guidance to federal courts in arbitration cases, including
NCS Contractors, 317 Md. at 403, 564 A.2d at 412, Gold Coast Mall v. Larmar Corp., 298
Md. 96, 104–05, 468 A.2d 91, 95–96 (1983), and Mayor of Balt. v. Balt. City Fire Fighters,
Local 734, 49 Md. App. 60, 65, 430 A.2d 99, 102 (1981).  Moreover, FOP provides a table
with over a dozen cases from other states relying on Nolde to hold that disputes arising after
an agreement’s expiration but arising under it may be arbitrable. 
On the contrary, the County argues that we should not adopt Nolde, challenging
Nolde’s applicability and insisting that Nolde “is simply not good law,”11 and that “its
holding is imprecise and embraces . . . disparate, inconsistent propositions.”  The County
contends “[t]here is a sufficient body of Maryland common law” on the interpretation of
arbitration agreements.  It also maintains that Nolde and Litton are not applicable here
because they involved the National Labor Relations Act, 29 U.S.C. § 152(2) (“NLRA”),
from which labor relations between local governments and their employees are excepted.
11
We find the County’s arguments unconvincing.  We are aware of no Maryland case
applying Maryland law in a situation like this, where the agreement containing an arbitration
clause has expired, but a party seeks to arbitrate a dispute it alleges arises under that
agreement.  Nolde and Litton, however, provide clear guidance on this issue.  Also, even
though Nolde and Litton involved NLRA, that fact did not play a role in the Court’s
reasoning in either of the two cases.  The applicability of Nolde and Litton’s vesting
principles to disputes not involving NLRA is further evidenced by the acceptance of the
Court’s reasoning in these two cases by many state courts.  See, e.g., Ahtna, Inc. v. Ebasco
Constructors, Inc., 894 P.2d 657, 663 (Alaska 1995) (applying the Nolde vesting principle
in the context of a joint-venture agreement); Ajida Techs., Inc. v. Roos Instruments, Inc., 104
Cal. Rptr. 2d 686, 694–95 (2001) (relying on Nolde in holding that parties’ obligations to
arbitrate may survive expiration of a marketing and development agreement); Shams v.
Howard, 165 P.3d 876, 879 (Colo. App. 2007) (applying Litton’s vesting principles to the
vesting of rights under an expired warranty agreement); Auchter Co. v. Zagloul, 949 So. 2d
1189, 1194 (Fla. Dist. Ct. App. 2007) (following the guidance of Nolde and Litton in
deciding arbitrability of a dispute arising under an expired construction contract); Homes by
Pate, Inc. v. DeHaan, 713 N.E.2d 303, 309 (Ind. Ct. App. 1999)(relying on Nolde in holding
that “a logical reading of the [residential building] warranty leads to the conclusion that, so
long as a defect has occurred within the . . . warranty coverage, any dispute concerning that
coverage must be arbitrated”).
Indeed, the Massachusetts high court has applied the Nolde vesting principles in a
12
situation very similar to this case.  See Boston Lodge 264, Dist. 38, Int’l Ass’n of Machinists
& Aerospace Workers v. Mass. Bay Transp. Auth., 452 N.E.2d 1155 (Mass. 1983).  In Boston
Lodge 264, the collective-bargaining agreement between the union and Massachusetts Bay
Transportation Authority (“MBTA”) called for cost-of-living adjustments benefitting union
members.  Id. at 1156.  The same agreement also provided for binding arbitration of any
disputes arising under the agreement.  Id.  When the agreement expired and MBTA failed
to make the adjustments, the union initiated arbitration.  MBTA refused to arbitrate, arguing
that the dispute was not arbitrable because the collective bargaining agreement had expired.
Id.  Relying on Nolde, the Supreme Judicial Court of Massachusetts held that the dispute was
arbitrable: 
Although the term of the collective bargaining agreement had
ended, there continued both a contractual obligation to make
cost-of-living adjustments under certain conditions and an
agreement to arbitrate any unresolved grievance arising out of
the agreement. The fact that the term of a collective bargaining
agreement has expired does not mean there can be no duty to
arbitrate issues arising out of that agreement, where the
agreement includes obligations extending beyond its term and
where there is a broadly expressed agreement to arbitrate
grievances arising out of that agreement.
Id. (citing, among others, Nolde, 430 U.S. at 254–55, 97 S. Ct. at 1073–74). 
Following in the footsteps of our sister states, we adopt the Nolde/Litton vesting
principles and hold that a broad arbitration clause may survive expiration of the underlying
agreement when the dispute arises under the agreement.  This may happen when the dispute
(1) “involves facts and occurrences that arose before expiration” of the agreement, (2) where
13
the rights that are the subject of the dispute “accrued or vested” during the life of the
agreement, or (3) “where, under normal principles of contract interpretation, the disputed
contractual right survives expiration of the remainder of the agreement.”  Litton, 501 U.S.
at 206, 111 S. Ct. at 2225. 
Our acceptance of the Nolde and Litton vesting principles in this situation is not
inconsistent with our reliance on the Supreme Court for guidance in other arbitration cases,
many of which are interlaced with the Supreme Court’s reasoning.  In addition to the
Maryland cases cited by FOP, reproduced above, we have followed the lead of the Supreme
Court in Holmes, when we held an arbitration clause to be severable from the rest of the
contract, 336 Md. at 541–42, 649 A.2d at 368 (quoting Prima Paint Corp. v. Flood &
Conklin Mfg. Co., 388 U.S. 395, 87 S. Ct. 1801 (1967)); in Curtis G. Testerman Co. v. Buck,
when we concluded that a non-party to an arbitration agreement may not be compelled to
arbitrate, 340 Md. 569, 584, 667 A.2d 649, 656 (1995) (citing Moses H. Cone Mem’l Hosp.
v. Mercury Const. Corp., 460 U.S. 1, 20, 103 S. Ct. 927, 939 (1983)); and in Messersmith,
Inc. v. Barclay Townhouse, when we held that the issue of whether there was an agreement
to arbitrate was to be decided by the court, not the arbitrator, 313 Md. 652, 661 & n.3, 547
A.2d 1048, 1052 & n.3 (1988) (citing John Wiley & Sons, Inc.v. Livingston, 376 U.S. 543,
547, 84 S. Ct. 909, 913 (1964) and AT & T Techs., Inc. v. Commc’ns Workers, 475 U.S. 643,
106 S. Ct. 1415 (1986)). 
II.
Who Decides Validity of Arbitration Clause in an Expired Agreement:
12The Nolde court stated: “Of course, in determining the arbitrability of the dispute,
the merits of the underlying claim for severance pay are not before us.  However, it is clear
that, whatever the outcome, the resolution of that claim hinges on the interpretation
ultimately given the contract clause providing for severance pay.”  430 U.S. at 249, 97 S. Ct.
at 1071.
13The Court reasoned that the issue was for the arbitrator because “[i]t is the
arbitrator’s construction which was bargained for; and so far as the arbitrator’s decision
concerns construction of the contract, the courts have no business overruling him because
their interpretation of the contract is different from his.”  Nolde, 430 U.S. at 253–54, 97 S.
Ct. at 1073 (quotation marks omitted) (quoting United Steelworkers of Am. v. Enter. Wheel
& Car Corp., 363 U.S. 593, 599, 80 S. Ct. 1358, 1362 (1960)).  
14
the Arbitrator or the Court
The second issue before us is who decides whether an arbitration clause survives
expiration of the underlying agreement, or using Nolde’s and Litton’s terms, whether the
grievance concerns a right that arose or vested under an expired agreement.  Nolde and Litton
reached conflicting conclusions on this issue.  Under Nolde, to determine that a dispute is
arbitrable, the court only needs to recognize—without deciding—that the merits  of the
dispute depend on the interpretation of the agreement.12  See 430 U.S. at 249, 97 S. Ct. at
1071.  But the ultimate “question of interpretation of the collective bargaining agreement is
a question for the arbitrator.”13  430 U.S. at 253, 97 S. Ct. at 1073 (citation omitted).   
In contrast, the Litton Court held that courts “must determine whether the parties
agreed to arbitrate this dispute, and we cannot avoid that duty because it requires us to
interpret a provision of a bargaining agreement.”  501 U.S. at 209, 111 S. Ct. at 2227. 
 Considering ample Maryland authority on the issue of who decides whether a dispute
is arbitrable, we find it unnecessary to attempt to resolve the conflict between Nolde and
14This tension between Nolde and Litton is borne out by the dissenting Justices
Stevens, Marshall, Blackmun, and Scalia, who argued that, like in Nolde, the Litton majority
should have left the arbitrability issue “reaching the merits” of the dispute “to an arbitrator
in the first instance, pursuant to the broad agreement of the parties to submit for arbitration
any dispute regarding contract construction.”  Litton, 501 U.S. at 218, 111 S. Ct. at 2231–32
(Stevens, J., dissenting) (Blackmun & Scalia, JJ., joining); id. at 211, 111 S. Ct. at 2228
(Marshall, J., dissenting) (Blackmun & Scalia, JJ., joining).   Justice Marshall emphasized
that in Nolde, the Court “carefully avoided expressing any view as to whether the substantive
provisions of the expired agreement had any posttermination effect precisely because the
parties had expressed their preference for an arbitral, rather than a judicial interpretation.”
Id. at 213–14, 111 S. Ct. at 2229.  In contrast, the Litton approach “invites protracted
litigation about what rights may ‘accrue’ or ‘vest’ under the contract—litigation aimed solely
at determining whether the dispute will be resolved by arbitration.”  Id. at 214, 111 S. Ct. at
2229.  
15The Circuit Court recognized that “[w]hile the Supreme Court’s language [in Litton]
expresses a fairly clear standard that is applicable to the facts of the case,” the Litton Court’s
holding with respect to who (the arbitrator or the court) decides the mixed issue of
arbitrability and the merits of a dispute contradicts the Maryland law.
16This may be particularly true in labor disputes because labor arbitrators often have
more expertise in those matters than do courts.  See United Steelworkers of Am., 363 U.S. at
582, 80 S. Ct. at 1353 (“The ablest judge cannot be expected to bring the same experience
and competence [as a labor arbitrator] to bear upon the determination of a grievance, because
he cannot be similarly informed.”).  
15
Litton14 or adopt reasoning of either of the two cases, and instead look to our own
jurisprudence for guidance on who—the arbitrator or the court—decides arbitrability of a
dispute allegedly arising under an expired agreement.15 
A.  Arbitrability As a Threshold Issue
We begin this part of the analysis by reiterating that in Maryland arbitration has often
been referred to as a “favored” method of resolving disputes, as it is considered “generally
a less expensive and more expeditious means of settling litigation and relieving docket
congestion.”16  Walther v. Sovereign Bank, 386 Md. 412, 425, 872 A.2d 735, 743 (2005). 
16
In accordance with the public policy favoring arbitration, the courts’ role in the arbitration
process—whether ruling on motions seeking to compel or stay arbitration or reviewing
arbitration awards—is limited.  Indeed, before a court can set aside an arbitration award,
there must be “fraud or . . . misconduct, bias, prejudice, corruption or lack of good faith on
the part of the arbitrator,” or if “it was not within the scope of the issues submitted to
arbitration,” or involved a “mistake so gross as to work manifest injustice.”  Bd. of Ed. v.
Prince George’s Cnty. Educators’ Ass’n., 309 Md. 85, 100–01, 522 A.2d 931, 938–39 (1985)
(citations omitted). 
The only circumstance in which courts play a leading role in cases involving
arbitration is in deciding arbitrability of a dispute.  Courts have a prerogative in that instance
“because the existence of an agreement to arbitrate is a threshold issue, [and] the courts must
have authority to assess, independently of the arbitrator’s point of view, whether or not the
parties ever reached such an agreement.”  Messersmith, Inc., 313 Md. at 660, 547 A.2d at
1052.  As this Court noted more than sixty years ago, “[t]he question [of arbitrability] is one
of intention . . . .  No one is under a duty to resort to [arbitration] tribunals, however helpful
their processes, except to the extent that he has signified his willingness.”  Id. at 658, 547
A.2d at 1051 (quoting Cont’l Milling & Feed Co. v. Doughnut Corp., 186 Md. 669, 675, 48
A.2d 447, 450 (1946)). 
Even in deciding arbitrability issues, however, “courts are limited to determining only
one thing:  whether a valid arbitration agreement exists” and must be careful not to “stray
into the merits of any underlying agreements.”  Cheek v. United Healthcare of the Mid-Atl.,
17To illustrate, in Messersmith, Inc. v. Barclay Townhouse, the parties disputed the
very existence of the agreement to arbitrate, arguing that the construction contract containing
the arbitration clause had not been signed.  313 Md. 652, 556, 547 A.2d 1048, 1050 (1988).
Determining the arbitrability of a dispute regarding the scope, quality of work of the
contractor, and the payment for its services did not require consideration of the contract as
a whole or deciding the merits of dispute.  Id. 
17
Inc., 378 Md. 139, 155, 159–60, 835 A.2d 656, 666–68 (2003); Holmes, 336 Md. at 546, 649
A.2d at 370–71 (“The scope of the court’s involvement extends only to a determination of
the existence of an arbitration agreement.”); see also Gold Coast Mall, 298 Md. at 103–04,
468 A.2d at 95 (stating the same limited scope of review under the Maryland Uniform
Arbitration Act).  This is not so difficult when parties disagree on issues “relating to the
formation of the arbitration agreement, . . . such as a claim of novation, or an allegation that
the agreement is void for lack of mutual consent.”17  Holmes, 336 Md. at 540, 649 A.2d at
367–68 (quoting Holmes v. Coverall N. Am., 98 Md. App. 519, 530, 633 A.2d 932, 937
(1993), aff’d, 336 Md. 534, 649 A.2d 365 (1994)).  
B.  When Arbitrability and Merits Overlap
Avoiding the merits of the dispute or the underlying agreement becomes more
difficult in cases where the very arbitrability of the dispute overlaps with its merits.  This
may happen (1) when the parties have agreed to arbitrate, but the scope of the arbitration
clause is unclear, making it necessary to interpret the entire contract, Gold Coast Mall, 298
Md. at 107–08, 468 A.2d at 97; or (2) when a party challenges the validity of an arbitration
clause based on some irregularity of the entire contract, which also requires inquiring into
the merits of the dispute, Holmes, 336 Md. at 534, 649 A.2d at 365.  These types of
18
arbitrability challenges may involve “issues arising after the formation of the arbitration
agreement, . . . such as rescission, fraud in the inducement, waiver, and termination of the
contract.”  Id., 649 A.2d at 368.  In those circumstances, “[w]hether the party seeking
arbitration is right or wrong is a question of contract application and interpretation for the
arbitrator, not the court, . . . and the court should not deprive the party seeking arbitration of
the arbitrator’s skilled judgment by attempting to resolve the ambiguity.”  NRT Mid-Atl., Inc.
v. Innovative Props., Inc., 144 Md. App. 263, 281, 797 A.2d 824, 834 (2002) (citation
omitted).
We have distinguished arbitrability issues that require interpretation of the entire
contract from those that do not depend on the merits of the dispute in Gold Coast Mall,
where the lease agreement contained conflicting language.  298 Md. at 100, 468 A.2d at 93.
 On the one hand, there was a broad arbitration clause requiring the parties to arbitrate any
disputes arising out of the contract; on the other hand, other clauses in the contract provided
the landlord with rights and remedies other than arbitration.  Id.  Appreciating the difficulty
of deciding arbitrability under those facts, we identified three sets of circumstances involving
arbitrability issues and explained their proper treatment by the courts:
Where the language of the arbitration clause is clear, and it is
plain that the dispute sought to be arbitrated falls within the
scope of the arbitration clause, arbitration should be compelled.
If it is apparent, on the other hand, that the issue sought to be
arbitrated lies beyond the scope of the arbitration clause, the
opposing party should not be compelled to arbitration, since
there is no agreement to arbitrate. . . .  A problem is created for
the court when the language of the arbitration clause is unclear
as to whether the subject matter of the dispute falls within the
19
scope of the arbitration agreement.  Courts that have considered
this problem have recognized that under such circumstances the
question of substantive arbitrability initially should be left to the
decision of the arbitrator, not the courts. 
Id. at 104–05, 468 A.2d at 95–96 (citing a long line of cases from other states).  Unable to
resolve the arbitrability issue without considering the lease agreement as a whole, we held
that the “question of substantive arbitrability should be left to the decision of the arbitrator.”
 Id. at 108, 468 A.2d at 97. 
We took the same approach in Holmes, 336 Md. 534, 649 A.2d 365.  There, a
franchisee attempted to avoid arbitration, alleging fraudulent inducement and violations of
the Franchise Act in an agreement with a broad arbitration clause.  Id. at 537, 541, 649 A.2d
at 366–67, 368.  Stressing the difference between “the issue of the validity of an arbitration
agreement in a contract” and “the merits of a dispute under such a contract,” we observed
that the franchisee did not allege that he “was fraudulently induced into agreeing to arbitrate
disputes or that the parties did not agree to arbitrate this type of dispute.”  Id. at 545–46, 649
A.2d at 370–71.  Rather, we emphasized, the allegations of fraudulent inducement “go to the
validity of the contract as a whole.”  Id. at 546, 649 A.2d at 371.  As such, “[t]hese claims
run to the merits of the dispute between the parties and do not suggest a ‘substantial and bona
fide dispute’ as to the actual existence of an arbitration agreement between the parties.”  Id.
We concluded that because the party resisting arbitration “has not alleged fraud in the
inducement as to the arbitration clause itself or that the parties did not intend to arbitrate this
type of a dispute, . . . the underlying dispute is one for the arbitrator.”  Id. at 547, 649 A.2d
20
at 371. 
Our intermediate appellate court considered the overlap of the arbitrability issue with
the merits of the underlying agreement under the circumstances even more similar to this
case in Nowak v. NAHB Research Center, Inc., 157 Md. App. 24, 848 A.2d 705 (2004).
There, former employees sought to stay arbitration of their employer’s claims after
termination of their employment.  Id. at 30, 848 A.2d at 709.  The employer relied on the
arbitration clause in the employment agreements, which required that any “dispute arising
out of or relating to” the contracts be subject to arbitration.  Id. at 28, 848 A.2d at 708.  The
employees argued, however, that their duty to arbitrate under the contract expired upon
termination of their employment.  Finding such arguments to implicate the merits of the case,
the Court of Special Appeals refused to decide the arbitrability issue:  
[I]t is clear that a mutually agreed upon arbitration
provision existed in the Contract. . . . Rather, [employees] argue
that the arbitration agreement . . . was no longer valid once they
were terminated as employees . . . . [T]his argument clearly goes
to the merits of the contract as a whole and is a question for the
arbitrator to decide. 
Id. at 34, 848 A.2d at 711.  Thus, while “the validity of an arbitration agreement” is an issue
for the courts, which a circuit court reviews anew, “the merits of the contract itself” are for
the arbitrator’s consideration, subject only to a deferential standard of review.  Id. at 33–34,
848 A.2d at 711; see also Holmes, 336 Md. at 534, 649 A.2d at 365.
C.  The Arbitrability of FOP’s Grievance 
18Arbitration agreements in Maryland are governed by common law, unless they
expressly provide that the Maryland Uniform Arbitration Act (“MUAA”) should apply.  See
Md. Code (1974, 2006 Repl. Vol.), § 3-206(b) of the Courts and Judicial Proceedings Article.
Because the MOU here did not expressly provide that MUAA applies, common law
principles guide our inquiry.
19The County did not address the arbitrability issue in its brief before us, arguing that
“[t]he argument presented in FOP’s Brief relates to a completely different question from that
21
With these principles in mind, we turn to the arbitrability issue in this case.18  If one
could decide that FOP’s grievance was arbitrable without interpreting the underlying MOU
or addressing the merits of FOP’s claims, the arbitrability issue in this case was an issue for
the court to decide initially.  But if the arbitrability issue cannot be so decided, it was within
the arbitrator’s purview.  
The arbitration clause here was part of the 2006-2007 MOU.  It defined as a
“grievance” “[a]ny dispute concerning the application or interpretation of the terms of [the
MOU]” and subjected to “binding arbitration” any “grievance” that was not settled through
other internal mechanisms.  The same MOU that contained the arbitration clause also stated
that “[t]he County shall provide the same health insurance benefit plans offered to active
employees for retirees not eligible for Medicare . . . . The health insurance subsidy in place
at the time of retirement shall remain in effect until the retiree becomes eligible for
Medicare.”  The MOU expired on June 30, 2007.  
Before the arbitrator, the Circuit Court, and the Court of Special Appeals, the County
painted a black and white picture of the arbitrability—or, rather, non-arbitrability—of FOP’s
grievance, arguing that the MOU’s expiration rendered inapplicable the arbitration clause.19
posed in its Petition for Writ of Certiorari.  In its Questions Presented, it focuses on whether
the court or the arbitrator determine arbitrability.  In its Argument, it contends that the
arbitrability should be determined without regard to the merits.”  We see no meaningful
difference between FOP’s Questions Presented and its arguments.  As we explained above,
typically when deciding whether a dispute is arbitrable requires considering the merits of the
dispute, the arbitrability issue is for the arbitrator to decide.  Thus, the distinction pointed out
by the County is superficial. 
20The County also argued before the Circuit Court that “[t]he duty to arbitrate ‘is a
matter of contract,’ and any duty here is created by the Memorandum of Understanding . .
. .  The agreement died on June 30, 2007.  The grievance filed here on September 14, 2007
fails as a matter of law because the contract expired.”  The County continued to argue before
the Court of Special Appeals: 
FOP’s grievance was based upon an MOU which no longer
existed.  Thus, the Arbitrator in this matter had no power,
authority or jurisdiction to arbitrate a grievance which occurred
after the expiration of the MOU.  He had no jurisdiction and the
grievance was not arbitrable. 
22
As far as the County was concerned, FOP had “nothing to arbitrate because [it] ha[d] no
agreement, there was no agreement in existence at the time this grievance was filed.”20
FOP responds that the arbitrability issue is not that simple.  It contends that the
MOU’s expiration does not determine the arbitrability of its grievance, but that the
arbitrability depends on whether the retiree health-care clause quoted above and other
clauses “in each of the MOUs governing retirements between 1992 and 2007 . . . reflect
binding and irrevocable promises by the County to provide the retiree health insurance
subsidy in effect at the time of [the officers’] retirement.”  
Although the County’s approach to the arbitrability issue presents a clear-cut
syllogism, it is based on a faulty premise.  First, the arbitration clause in question subjected
21The County insists that the arbitration clause in question is narrow, but the language
of the arbitration clause supports the opposite conclusion.  The County concedes that “the
grievance filed by FOP . . . falls within [the] definition of a grievance,” but argues that the
grievance procedure set forth in the MOU “limit[ed] the Arbitrator’s role to resolving the
dispute concerning application and interpretation of the MOU and prohibit[ed] the Arbitrator
from . . . rewriting the MOU.” 
Even if the MOU somehow limited the arbitrator’s authority in deciding disputes, this
“limiting” language did not narrow the scope of arbitrable disputes arising out of “the
application or interpretation” of the MOU’s terms:  “Any dispute concerning the application
or interpretation of the terms of this Memorandum of Understanding . . . shall be subject to
binding arbitration.”  Thus, we reject the County’s argument that the arbitration clause here
is narrow.
22There is no doubt that, if this dispute had arisen during the MOU’s lifetime, it would
have been arbitrable.  But in light of the MOU’s expiration, the clause’s continued vitality
is not so clear. 
23
to arbitration “any dispute concerning the application or interpretation of this Memorandum
of Understanding.”  As this clause “call[ed] for the arbitration of . . .  any and all disputes
arising out of the contract,” it is a broad arbitration clause,21 and generally, “[w]here there
is a broad arbitration clause, . . . all issues are arbitrable unless expressly and specifically
excluded.”22  Gold Coast Mall, 298 Md. at 104, 468 A.2d at 95; accord NSC Contractors,
Inc., 317 Md. at 403, 564 A.2d at 412; Crown Oil & Wax Co. of Del. v. Glen Constr. Co. of
Va., 320 Md. 546, 560, 578 A.2d 1184, 1190 (1990).  Since the arbitration clause was not
limited to disputes arising during the MOU’s term, we reject the County’s argument that the
MOU’s expiration necessarily abrogated this broad arbitration clause. 
Second, the County’s logic fails because it is well-established in Maryland that “an
arbitration clause is a severable contract which is enforceable independently from the
contract as a whole.”  Cheek, 378 Md. at 165, 835 A.2d at 671–72 (quoting Holmes, 336 Md.
24
at 545, 649 A.2d at 370).  Indeed, our prior cases illustrate that it is possible for an
arbitration clause to be enforceable even though the contract that contains it may not be
valid.  See Holmes, 336 Md. at 547, 649 A.2d at 371 (“By enforcing the arbitration
agreement, we merely hold that the mutual promises to arbitrate constitute a separate
agreement contained in the contract in question and that the arbitration clause itself is not in
dispute.  The validity of the contract as a whole is a question left for the arbitrators.”); see
also Nowak, 157 Md. App. at 33–34, 848 A.2d at 711.  Accordingly, even though the MOU
had expired, the arbitration clause was not necessarily unenforceable. 
Quite the opposite, Nolde and Litton teach us that a dispute arising after the expiration
of an agreement may be arbitrable if it arises under that agreement.  See Nolde, 430 U.S. at
249, 97 S. Ct. at 1071.  Such a dispute will be arbitrable if (1) the grievance “involves facts
and occurrences that arose before expiration, [2] where an action taken after expiration
infringes a right that accrued or vested under the agreement, or [3] where, under normal
principles of contract interpretation, the disputed contractual right survives expiration of the
remainder of the agreement.”  Litton, 501 U.S. at 206, 111 S. Ct. at 2225. 
Under the Nolde and Litton vesting principles, FOP’s grievance is arbitrable if the
rights that are the subject of FOP’s grievance vested during the MOU’s term.  As FOP’s
arguments underscore, in its view, the health-insurance clauses contained in the respective
MOUs “reflect binding and irrevocable promises by the County” to maintain the 85/15 split,
but in the County’s view, they did not.  Thus, as in Nolde, where “the resolution of [Nolde’s]
claim hinges on the interpretation ultimately given the contract clause providing for
25
severance pay,” 430 U.S. at 249, 97 S. Ct. at 1071, in this case “[t]he parties’ dispute
regarding the vesting of retiree health benefits . . . arises from conflicting interpretations of
the retiree health care provision of the MOUs.”
Accordingly, in this case, whether the retirees’ rights to the 85/15 split vested during
the MOU’s term provides both the answer to the arbitrability issue and the merits of FOP’s
grievance.  If one determines that the retirees’ rights vested, then in accordance with the
Nolde and Litton vesting principles, one would have to determine that FOP’s grievance was
arbitrable.  But if one decided that the retirees’ rights did not vest, one would have to
conclude that FOP’s grievance was not arbitrable.  This analysis, however, hinges on the
interpretation of the MOU, and the outcome depends on the meaning of the health-insurance
premium provision. 
As we discussed above, Maryland’s arbitrability precedents prohibit courts from
considering the merits of the dispute.  See Cheek, 378 Md. at 154, 835 A.2d at 665 (refusing
to “stray[] into the prohibited morass of the merits of the claims”); Gold Coast Mall, 298
Md. at 100, 104–05, 468 A.2d at 93, 95–96 (leaving the arbitrability issue to the arbitrator
when “the language of the arbitration clause is unclear as to whether the subject matter of
the dispute falls within the scope of the arbitration agreement”); Holmes, 336 Md. at 546,
649 A.2d at 371 (the allegations of fraudulent inducement “go to the validity of the contract
as a whole,” and as such, “run to the merits of the dispute between the parties and do not
suggest a ‘substantial and bona fide dispute’ as to the actual existence of an arbitration
agreement between the parties”); Nowak, 157 Md. App. at 34, 848 A.2d at 711 (“[The]
26
argument [that the agreement is no longer valid because employment was terminated] clearly
goes to the merits of the contract as a whole and is a question for the arbitrator to decide.”);
Balt. v. Balt. Fire Fighters, Local 734, I.A.F.F., 93 Md. App. 604, 613–14, 613 A.2d 1023,
1027–28 (1992) (“[T]he essence of the City’s argument on this point is that the Unions’
claims are not meritorious, i.e., the Unions have not demonstrated any ‘right’ to the benefits
they claim.  This is an argument to be made to the arbitrator; it is not a consideration in
determining whether a dispute is arbitrable.”).  Thus, because both the arbitrability and the
merits of FOP’s grievance depend on whether retirees’ rights in the 85/15 health-insurance
premium split vested prior to the MOU’s expiration, we conclude that in this case the issue
of whether FOP’s grievance was arbitrable was an issue for the arbitrator to decide in the
first instance.    
This holding does not take away from the courts the authority to determine the
threshold issue of whether the parties agreed to arbitrate their disputes.  Courts are tasked
with determining arbitrability issues to ensure that only parties who agreed to go to
arbitration are compelled to do so.  Messersmith, Inc., 313 Md. at 652, 547 A.2d at 1052.
In this case, the County and FOP have expressed their confidence in the arbitration process
and indicated their preference for the arbitral, rather than judicial, forum by agreeing that
“any disputes” not settled through a grievance procedure be subject to “binding arbitration.”
Although subsequently to that agreement to arbitrate, the underlying agreement expired, that
fact has “little impact on many of the considerations behind [the parties’] decision to resolve
their contractual differences through arbitration” in the first place.  Nolde, 430 U.S. at 254,
27
97 S. Ct. at 1073.  Thus, our holding is limited to cases like this one, where we have a broad
arbitration clause, and the arbitrability issue hinges on the interpretation of the underlying
agreement and the merits of the dispute. 
III. 
Summary Judgment in this Case 
We finally turn to the Circuit Court’s rulings in this case.  The Circuit Court entered
summary judgment in FOP’s favor and against the County, finding that FOP’s grievance was
arbitrable and that FOP was entitled to judgment as a matter of law.  Before we analyze the
court’s rulings, however, we take another detour and make clear what standard of review we
must apply. 
A.  Standard of Review 
Neither in their briefs nor in oral arguments were the parties clear on what standard
of review governs this case.  FOP did not address this issue in its brief but at oral argument
conceded that questions of substantive arbitrability, i.e. whether an agreement to arbitrate
exists or whether an arbitration clause governs the dispute in question, are subject to a non-
deferential standard of review.  In contrast, issues that go to the merits of the dispute, such
as whether the right to a certain health-insurance premium split is a “vested” right, are
subject to a deferential standard of review.  
The County advocated a different approach:  it analogized the “review” of arbitration
23The County did not produce a standard of review in its brief to this Court but
incorporated by reference the standard of review it placed in its Court of Special Appeals’
brief.  Had the County reproduced the standard of review here, it might have realized that the
standard of review it proposed to the Court of Special Appeals was incorrect. 
28
awards to judicial review of administrative decisions.23  Citing a number of cases reviewing
decisions of administrative agencies without explaining their relevance, the County
maintained:  “[a]lthough the judicial act being appealed is the Circuit Court’s Order granting
summary judgment to FOP, this court should look not so much at the Circuit Court Order
as through it to the July 15, 2008 Award of the Arbitrator.”  The County continued, “a
review on the ultimate merits is now being conducted by the appellate court.  The court is
not reviewing the procedural correctness of the earlier review by the circuit court.  It is
undertaking its own de novo review of the earlier administrative decisions.” 
The parties’ arguments are misplaced.  It is true that most jurisdictional conclusions,
i.e. that a dispute is arbitrable, are reserved for the courts in the first instance, and arbitrators’
findings in that regard are typically subject to non-deferential review by a court.
Messersmith, Inc., 313 Md. at 663, 547 A.2d at 1053.  Moreover, when it comes to the merits
of the parties’ claims, “mere errors of law or fact would not ordinarily furnish grounds for
a court to vacate or to refuse enforcement of an arbitration award.”  Prince George’s Cnty.
Educators’ Ass’n, 309 Md. at 99, 522 A.2d at 937. 
But, as we have recently explained, “[w]hen it comes to appellate procedure, . . . the
standard of review in either this Court or the Court of Special Appeals is determined by the
circuit court’s disposition of the matter.”  Montgomery Cnty. v. Fraternal Order of Police,
24Likewise, in Messersmith, Inc., which is frequently quoted for the de novo standard
of review, when we said that the reviewing court may base its decision to stay an arbitration
proceeding “upon its independent assessment of the evidence,” we were not speaking of this
Court or the intermediate appellate court but were referring to the circuit court instead.  313
Md. at 663, 547 A.2d at 1053.  Like in this case, in Messersmith, Inc., the circuit court was
actually faced with cross-motions for summary judgment, and on appeal, the Court of Special
Appeals and this Court reviewed the circuit court’s holding for legal error.  Montgomery
Cnty. v. Fraternal Order of Police, 427 Md. 561, 571, 50 A.3d 579, 585 (2012) (citing
Barclay Townhouse v. Messersmith, Inc., 67 Md. App. 493, 508 A.2d 507 (1986), aff’d, 313
Md. at 659, 547 A.2d at 1051). 
29
427 Md. 561 at 571, 50 A.3d 576, 585 (2012).  For example, in Montgomery County, one
of our most recent cases involving arbitration, the circuit court reviewed the arbitrator’s
determination of arbitrability de novo, granting summary judgment on the matter.  427 Md.
at 572, 50 A.3d at 585.  When the dispute reached this Court, however, we did not review
the arbitrator’s determination anew but instead “review[ed] the circuit court’s disposition for
legal error,” which is the proper standard of review for summary judgment dispositions.24
Id.  (citing Messing v. Bank of Am., N.A., 373 Md. 672, 684, 821 A.2d 22, 28 (2003) (“The
standard of review of a trial court’s grant of a motion for summary judgment on the law is
. . . whether the trial court’s legal conclusions were legally correct.”)).
The same standard of review applies in this case.  Our task is limited to ensuring that,
in granting summary judgment in favor of FOP and against the County, the Circuit Court’s
decision to leave undisturbed the arbitrator’s findings was legally correct.  In other words,
we must make sure that FOP was entitled to judgment as a matter of law.  See Wash. Homes,
Inc. v. Interstate Land Dev. Co., 281 Md. 712, 717, 382 A.2d 555, 557 (1978).
B.  The Circuit Court’s Grant of Summary Judgment 
30
Thus, the Circuit Court would be legally correct in granting summary judgment in
FOP’s favor, if (1) it reviewed the arbitrator’s findings under a proper standard of review and
(2) if FOP was entitled to judgment as a matter of law. 
As the arbitrability of FOP’s grievance was a decision to be initially made by the
arbitrator, that decision was subject to the same deferential standard of review as the
arbitrator’s findings on the merits.  Thus, the Circuit Court needed to make sure that both the
arbitrator’s findings (1) that FOP’s grievance was arbitrable and (2) that FOP was entitled
to relief did not constitute a “palpable mistake of law or fact apparent on the face of the
award or a mistake so gross as to work manifest injustice.”  Prince George’s Cnty.
Educators’ Ass’n, 309 Md. at 105, 522 A.2d at 941 (quotation marks omitted).  Because the
Circuit Court was unsure what standard to apply in reviewing the arbitrator’s arbitrability
finding, the Circuit Court subjected that finding to both a deferential and non-deferential
standard of review.  As for the award itself, the court “awarded great deference” to the
arbitrator’s findings.  Accordingly, the Circuit Court applied a proper standard of review in
both instances. 
We now look to the arbitrator’s findings to determine whether the Circuit Court was
legally correct in granting summary judgment in FOP’s favor.  The arbitrator began his
opinion by acknowledging the County’s argument about the supposedly preclusive effect of
the MOU’s expiration on the arbitrability of FOP’s grievance.  Relying on Nolde and Litton,
the arbitrator responded to the County’s challenge by stating that “[t]he end of a labor
contract, however, does not always signal the death of negotiated rights thereunder,
31
including the right to have a dispute over that matter resolved through arbitration.”  The
arbitrator then discussed Nolde and Litton for their vesting principles and concluded that “the
ultimate question is whether the retiree rights at issue may be considered vested and thus
capable of continuing enforcement.”
In the arbitrator’s view, the question of vesting “is answered directly by the
unequivocal language of the MOUs:  The statement that ‘the health insurance subsidy in
place at the time of retirement shall remain in effect until the retiree becomes eligible for
Medicare’ is subject to no interpretation other than that here proposed by the FOP.”  He
continued, “[w]hen the parties bargained this language, they made a binding promise to
retirees that the subsidy would remain at whatever level existed at their retirement.  That is
a vested right, and it was not, and could not be, changed by the [subsequent] negotiations .
. . .”  The arbitrator concluded: “[o]fficers who retired on or after February 1, 1992 and
before July 1, 2007 have a vested right to retain the health insurance split applicable to them
as active officers at the time of their retirement.”
The County attacks the arbitrator’s findings on several fronts.  In addition to arguing
against the application of Nolde and Litton to this case, the County suggests that the
“Arbitrator acknowledged, but did not address, the County’s argument that all obligations
under the Agreement expired, including both the healthcare obligations and the independent
obligation to arbitrate.”  According to the County, this alleged failure to consider whether
the arbitration clause had expired gives basis to vacate the arbitration award not only for a
palpable mistake in law, but also for failure “to consider all matters submitted.” 
32
The County also argues that the healthcare subsidy was not a vested right.  Here, the
County asserts that “[t]here is no ‘vested right’ to future health insurance benefits and
subsidies in the expired FY 2007 MOU, based on evidence, long-standing practice, and
applicable law.”  In support of this statement, the County mentions the Labor
Commissioner’s testimony, where he stated that “there is no vested right to health insurance
benefits and there never has been such a right in Baltimore County.”  The County also points
out that  “there is no statutory requirement that County employees be provided with health
care benefits.” 
The County’s arguments are unavailing.  First, we agree with FOP that “as a corollary
to his express findings that the right had vested, and as a necessary precondition to his
granting the grievance, the arbitrator necessarily determined that the arbitration clause was
enforceable and that the grievance was arbitrable.”  The arbitrator’s consideration of the
arbitrability of the dispute and the merits of the case illustrates the interconnectedness of
these two issues in cases where arbitrability depends on the interpretation of the underlying
agreement.  Having found that the retirees were entitled to the health-insurance premium
split in effect at the time of their retirement, the arbitrator necessarily also found, by
implication, that the arbitration clause survived the MOU’s expiration, and the dispute was
arbitrable.  See Nolde, 430 U.S. at 249, 97 S. Ct. at 1071 (“[I]n determining the arbitrability
of the dispute, the merits of the underlying claim for severance pay are not before us.
However, it is clear that, whatever the outcome, the resolution of that claim hinges on the
interpretation ultimately given the contract clause providing for severance pay.”); Litton, 501
33
U.S. at 205–06, 111 S. Ct. at 2225 (“A postexpiration grievance can be said to arise under
the contract only where it involves facts and occurrences that arose before expiration, where
an action taken after expiration infringes a right that accrued or vested under the agreement,
or where, under normal principles of contract interpretation, the disputed contractual right
survives expiration of the remainder of the agreement.”). 
Second, like the Circuit Court, we see no reason to disturb the arbitrator’s finding of
vesting.  The County’s arguments on the lack of county employees’ statutory entitlement to
health care based on Commissioner Gay’s testimony simply miss the point.  The arbitrator
found that the rights had vested based on his interpretation of the underlying MOU, which
stated that “the health insurance subsidy in place at the time of retirement shall remain in
effect until the retiree becomes eligible for Medicare.”  We do not think that the arbitrator’s
reading of this clause as a “binding promise” constituted a “manifest disregard of the law”
or resulted in “manifest injustice.”  Prince George’s Cnty. Educators’ Ass’n, 309 Md. at 105,
522 A.2d at 941.  On the contrary, we agree with the Circuit Court that the arbitrator’s
interpretation of this language was consistent with the objective theory of contract
interpretation that Maryland adheres to, under which courts give primary effect to the terms
of the agreement.  Cochran v. Norkunas, 398 Md. 1, 16, 919 A.2d 700, 709 (2007).
In any event, the arbitrator’s findings are awarded a great deal of deference and
should not be disturbed, unless the arbitrator demonstrates a “manifest disregard of the law
. . . beyond and different from a mere error in the law or failure on the part of the arbitrator[]
to understand or apply the law.”  Prince George’s Cnty. Educators’ Ass’n, 309 Md. at 102,
34
522 A.2d at 939.  Since we see no such mistakes here, we conclude that the Circuit Court
correctly determined that FOP was entitled to judgment as a matter of law.  Thus, we reverse
the judgment of the Court of Special Appeals. 
Conclusion 
We agree with the Circuit Court’s decision to leave undisturbed the arbitrator’s
findings in this case.  The fact that the MOU has expired does not mean the County had no
duty to arbitrate disputes arising out of that MOU.  A dispute may be arbitrable after the
expiration of the underlying agreement, if the agreement contained a broad arbitration clause
and the rights that are the subject of the dispute accrued or vested during the life of the
agreement.  
The MOU’s arbitration clause was broad.  It did not exclude grievances arising after
the expiration of the MOU but pertained to “[a]ny dispute concerning the application or
interpretation” of the MOU.  The arbitrator found that FOP’s grievance was arbitrable even
after the MOU’s expiration because—based on the arbitrator’s reading of the MOU’s health-
insurance clause—retirees’ rights to an 85/15 health-insurance premium split had vested at
the time of their retirement.  The Circuit Court was legally correct in granting summary
judgment in FOP’s favor after subjecting the arbitrator’s findings to a deferential standard
of review.  Thus, we reverse the judgment of the Court of Special Appeals.  
JUDGMENT OF THE COURT OF SPECIAL
APPEALS REVERSED; CASE REMANDED
TO THE COURT OF SPECIAL APPEALS
35
WITH DIRECTIONS TO AFFIRM THE
JUDGMENT OF THE CIRCUIT COURT
FOR BALTIMORE COUNTY; COSTS
IN THIS COURT AND IN THE COURT OF
SPECIAL APPEALS TO BE PAID BY
RESPONDENT.