Case Name: SCHOOL DISTRICT OF SPOONER, Petitioner-Respondent-Petitioner, v. NORTHWEST UNITED EDUCATORS, Respondent-Appellant, WISCONSIN EMPLOYMENT RELATIONS COMMISSION, Intervenor-Respondent and Co-Appellant
Court: Wisconsin Supreme Court
Jurisdiction: Wisconsin
Decision Date: 1987-03-09
Citations: 136 Wis. 2d 263
Docket Number: No. 84-1625
Parties: SCHOOL DISTRICT OF SPOONER, Petitioner-Respondent-Petitioner, v. NORTHWEST UNITED EDUCATORS, Respondent-Appellant, WISCONSIN EMPLOYMENT RELATIONS COMMISSION, Intervenor-Respondent and Co-Appellant
Judges: 
Reporter: Wisconsin Reports Second
Volume: 136
Pages: 263–280

Head Matter:
SCHOOL DISTRICT OF SPOONER, Petitioner-Respondent-Petitioner, v. NORTHWEST UNITED EDUCATORS, Respondent-Appellant, WISCONSIN EMPLOYMENT RELATIONS COMMISSION, Intervenor-Respondent and Co-Appellant
Supreme Court
No. 84-1625.
Argued January 7, 1987.
Decided March 9, 1987.
(Also reported in 401 N.W.2d 578.)
For the petitioner-respondent-petitioner there was a brief and oral argument by Thomas J. Bitney, Woodrow Wilson Bitney and Bitney Law Firm, Ltd., Spooner.
For the intervenor-respondent and co-appellant the cause was argued by John D. Niemisto, assistant attorney general, with whom on the brief was Bronson C. La Follette, attorney general.
For the respondent-appellant there was a brief by Priscilla Ruth MacDougall and Wisconsin Education Association Council, Madison, and oral argument by Priscilla Ruth MacDougall.

Opinion:
HEFFERNAN, CHIEF JUSTICE.
This is a review of an unpublished opinion dated January 21, 1986, which reversed a decision of the circuit court for Washburn county vacating an arbitrator's award. We reverse the decision of the court of appeals and remand for further arbitration.
The arbitrator had directed that petitioner, School District of Spooner (hereinafter "School District") reinstate with back pay John Patrick, an industrial arts teacher whom it had discharged, on the grounds that the School District had lacked just cause for Patrick's dismissal. The circuit court for Wash-burn county vacated the arbitrator's award on the merits because it found the arbitrator's failure to disclose that he had once been employed by the Wisconsin Education Association Council ("WEAC") to constitute evident partiality, and because it found that the arbitrator exceeded his authority under the collective bargaining agreement between the parties. The court of appeals reversed the circuit court's decision on both issues and reinstated the arbitrator's award. Because we find that the arbitrator's failure to disclose his prior employment with WEAC constitutes evident partiality, we reverse the decision of the court of appeals and remand the case for re-arbitration. We thus do not reach the merits of the arbitrator's award or the question of whether the award exceeded the authority granted to the arbitrator under the collective bargaining agreement.
John Patrick was an industrial arts teacher in the Spooner School District from 1965 until his dismissal on June 1, 1981. On April 9 of that year, he went drinking with some friends, became intoxicated, and, later that night, broke into a locked truck. He stole several items from the truck. The theft was reported, and the missing items were found on Patrick's property the next day. Patrick told authorities that he had no recollection of the incident. However, he was arrested and charged with theft and intentionally entering a locked vehicle with intent to steal. He was also suspended from his teaching job. Patrick subsequently entered into a plea agreement whereby he pleaded no contest to the charge of entering a locked vehicle in exchange for dismissal of the theft charge.
Between the time Patrick was charged and the time he entered into the plea agreement, the School District held a hearing in order to determine the facts surrounding the incident. Patrick did not participate because the criminal charges had not yet been resolved. The School District decided to continue the suspension.
Four days after Patrick entered into the plea agreement, the School District held a meeting at which it decided to dismiss him. Patrick was allowed to be present, but was limited to speaking about the alcohol and psychiatrist counselling he had received since the incident. He was not permitted to present evidence or witnesses, having been deemed by the School District to have forfeited his opportunity to do so because he had not participated in the previous hearing.
After the School District decided to discharge Patrick, a grievance was filed on his behalf. The matter was submitted to arbitration, pursuant to the collective bargaining agreement between the School District and the Spooner Education Association. The Wisconsin Employment Relations Commission ("WERC") assigned arbitrator William C. Houlihan to the dispute. A hearing was held on February 12,1982, after which the parties filed briefs. The School District was represented by its counsel, while the teacher's union was represented by Priscilla Ruth MacDougall, a WEAC staff attorney.
The arbitrator directed that Patrick be reinstated with back pay. He concluded that the School District lacked just cause to dismiss Patrick. The School District then commenced this action in Washburn county circuit court. It argued that the award should be vacated under sec. 788.10(1), Stats., on the ground of evident partiality and because the arbitrator had exceeded the powers granted to him under the collective bargaining agreement. The School District alleged that arbitrator Houlihan had worked for WEAC prior to his employment with the WERC, had worked for Priscilla Ruth MacDougall while at WEAC, and had failed to disclose these facts to the School District before hearing the dispute. It also alleged that the WERC had failed to disclose arbitrator Houlihan's past employment.
Arbitrator Houlihan admitted, in interrogatories, that he had worked for WEAC as a part-time law clerk while he was in law school. He was employed there for approximately eighteen months. During that time, however, he was not assigned to work for Priscilla Ruth MacDougall; he only prepared one internal memorandum for her during the entire course of his employment with WEAC. Apparently, he also attended a party that MacDougall gave for all WEAC law clerks and their spouses. Arbitrator Houlihan also stated that he had not been involved in any discharge cases while at WEAC. Finally, he acknowledged that he could not recall having advised the School District or its counsel that he had been employed by WEAC before becoming an arbitrator.
The circuit court agreed that arbitrator Houlihan should have disclosed his prior employment with WEAC before arbitrating the dispute. Because it found that a reasonable person, as a party to the arbitration, upon being advised of Houlihan's prior employment at WEAC and of the fact that he had prepared a memo for Priscilla Ruth MacDougall while employed there, would have sufficient doubts as to Houlihan's impartiality that he or she would investigate further, the circuit court found evident partiality and vacated the award.
On review, the court of appeals reversed the circuit court's finding of evident partiality, concluding that there was no evidence that would cause a reasonable person to doubt arbitrator Houlihan's impartiality. It found that Houlihan's "indirect professional contact and very slight social contact with MacDougall four years prior to this arbitrated dispute" did not constitute evident partiality. The court of appeals also affirmed the award on its merits, and remanded the case with directions that an order be entered confirming the award.
In reviewing the decision of the court of appeals that arbitrator Houlihan's past employment with WEAC does not constitute evident partiality, this court is presented with a question of law. Whether facts fulfill a particular legal standard is a question of law. Nottelson v. ILHR Department, 94 Wis. 2d 106, 116, 287 N.W.2d 763 (1980). This court decides questions of law independently, without deference to the decisions of the trial court or court of appeals. Ball v. District No. 4, Area Board, 117 Wis. 2d 529, 537, 345 N.W.2d 389 (1984).
The test for evident partiality was laid out by this court in Richco Structures v. Parkside Village, Inc., 82 Wis. 2d 547, 263 N.W.2d 204 (1978). An arbitrator's award must be vacated on the ground of evident partiality if "the reasonable person, as a party to the arbitration proceeding, upon being advised of the undisclosed matters, would have such doubts regarding the prospective arbitrator's impartiality that he or she would investigate further, would demand that the arbitration be conducted on terms which would provide checks on the arbitrator's exercise of discretion, or would take other protective measures to assure an impartial arbitration and award." 82 Wis. 2d at 562.
The Richco Structures court discussed the types of disclosures required to be made by an arbitrator. Rejecting the notion that the concept of "evident partiality" was restricted to cases where there is proof that "an arbitrator has an interest in the outcome of the proceeding" or where "a relationship exists between the arbitrator and a party or a party's representatives which is so substantial that the arbitrator's interest in the outcome may be inferred," Richco Structures construes "evident partiality" as a much broader concept. 82 Wis. 2d at 557-59. According to Richco Structures, an arbitrator must disclose:
1. Relationships or transactions with the parties or their representatives.
2. Facts which might indicate to a reasonable person that the arbitrator may have an interest in the outcome of the arbitration.
3. Facts which may reasonably support an inference, or the appearance of the existence of bias, prejudice, partiality, or the absence of impartiality. See, 82 Wis. 2d at 558.
Further, an arbitrator's failure to disclose any of the above is sufficient to constitute evident partiality. 82 Wis. 2d at 558-59.
The reasons for requiring disclosure are obvious. The parties to an arbitration proceeding have an expectation that their dispute will be heard and resolved by an impartial, disinterested arbitrator. Disclosure at the outset, before any hearings begin, allows the parties to determine for themselves whether they believe that the arbitrator will be able to decide their dispute impartially. The very limited scope of judicial review of arbitrators' decisions makes selection of an impartial arbitrator particularly important. Also, disclosure at the outset promotes efficiency. Without a doubt, many of the facts disclosed by arbitrators before the hearing will, either immediately or after brief investigation, be viewed as harmless by the parties and the arbitration will proceed. Facts that are not disclosed, but come to a party's attention during the proceedings or after an award is made, however, may raise more suspicion than they would had they been dealt with openly, and may result in time-consuming review by the judicial system as well as re-arbitration. See, Richco Structures, 82 Wis. 2d at 558-61.
The reasonable person, upon being informed that arbitrator Houlihan had written a memo for the teacher's union's counsel four years earlier and attended a party that she gave for law clerks and their spouses, might well conclude that there was not sufficient doubt as to arbitrator Houlihan's impartiality to impel further investigation. We do not agree, however, with the court of appeals' position that arbitrator Houlihan's prior employment with WEAC does not constitute evident partiality.
A reasonable person, as a party to an arbitration proceeding, upon being advised that the arbitrator selected had been employed by the entity that supplied the other party's counsel, might well have such doubts regarding the arbitrator's impartiality that he or she would investigate further, demand checks on the arbitrator's exercise of discretion, or would take other protective measures to insure an impartial award. A prospective arbitator must therefore disclose, prior to hearing the dispute, all past employment with a party or with an entity that has supplied counsel for a party. Failure to disclose such past employment constitutes evident partiality.
This is not to say that an arbitrator's past employment with a party demonstrates that the arbitrator is partial. We emphasize that the phrase, "evidence partiality," should be broadly construed to mean "evidence of possible partiality," rather than narrowly construed to mean "partiality is self-evident." Past employment with a party is only evidence of possible partiality; once the other party has ascertained the time, nature, and duration of the past employment, it may well conclude that the arbitrator is able to decide the dispute impartially. Disclosure is necessary, however, in order to afford the other party the opportunity to make the relevant inquires and decide for itself after investigation whether the arbitrator selected is impartial and disinterested. Thus, a finding of evident partiality may be based on any undisclosed facts which are evidence of impartiality; actual impartiality or facts from which partiality is a foregone conclusion are not required.
We hold that arbitrators must disclose, prior to hearing a dispute, any past employment with a party to the dispute or, as in this case, with an entity that supplies counsel for a party to the dispute. In so modifying the requirements of Richco Structures regarding evident partiality and an arbitrator's duty of disclosure, this court expresses no opinion as to whose duty it is to make the required disclosures when the arbitrator is selected by a governmental agency rather than by the parties. Thus, it is not necessary for this court to decide whether arbitrator Houlihan or the WERC should have disclosed the arbitrator's past employment with WEAC. What matters is that such a disclosure is required to be made. Who makes the disclosure can be determined as a matter of internal agency procedure where a governmental agency is involved.
There is clear and convincing evidence that arbitrator Houlihan was previously employed by WEAC, which supplied counsel for the teacher's union in this case, and failed to disclose this fact before hearing the dispute. This failure to disclose constitutes evident partiality. We therefore reverse the court of appeals' decision confirming the arbitrator's award, and vacate the award. Because re-arbitration, not vacation on the merits, is the remedy for evident partiality, we remand the case for further arbitration.
By the Court.-Decision of the Court of Appeals reversed and cause remanded.
Sec. 788.10(1), Stats., provides:
788.10 Vacation of award, rehearing by arbitrators. (1) In either of the following cases the court in and for the county wherein the award was made must make an order vacating the award upon the application of any party to the arbitration:
(a) Where the award was procured by corruption, fraud or undue means;
(b) Where there was evident partiality or corruption on the part of the arbitrators, or either of them;
(c) Where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy: or of any other misbehavior by which the rights of any party have been prejudiced;
(d) Where the arbitrators exceeded their powers, or so. imperfectly executed them that a mutual, final and definite award upon the subject matter submitted was not made.
The circuit court also vacated the award on its merits, finding that arbitrator Houlihan exceeded the authority granted to him under the collective bargaining agreement. As noted above, we do not reach the merits of the arbitrator's decision because we remand the case for further arbitration, based on our finding of evident partiality.
Because no provision of the collective bargaining agreement requires the arbitrator's award to be made within a certain time period, re-arbitration is not barred by sec. 788.10(2), Stats. Sec. 788.10(2) provides:
" (2) Where an award is vacated and the time within which the agreement required the award to be made has not expired, the court may, in its discretion, direct a rehearing by the arbitrators."