Title: Baldwin-Woodville Area School Dist. v. West Central Education Assoc.
Citation: 2009 WI 51
Docket Number: 2008AP000519
State: Wisconsin
Issuer: Wisconsin Supreme Court
Date: June 17, 2009

2009 WI 51 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
2008AP519 
COMPLETE TITLE: 
 
 
Baldwin-Woodville Area School District, 
          Plaintiff-Appellant, 
     v. 
West Central Education Association - Baldwin 
Woodville Unit, 
          Defendant-Respondent-Petitioner. 
 
 
 
 
REVIEW OF A DECISION OF THE COURT OF APPEALS 
Reported at: ___ Wis. 2d ___, 760 N.W.2d 184 
(Ct. App. 2008-Unpublished) 
 
 
OPINION FILED: 
June 17, 2009   
SUBMITTED ON BRIEFS: 
        
ORAL ARGUMENT: 
April 16, 2009   
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
Circuit   
 
COUNTY: 
St. Croix   
 
JUDGE: 
Eric J. Lundell   
 
 
 
JUSTICES: 
 
 
CONCURRED: 
        
 
DISSENTED: 
PROSSER, J., dissents (opinion filed).   
 
NOT PARTICIPATING:         
 
 
 
ATTORNEYS: 
 
For the defendant-respondent-petitioner there were briefs 
by Jina L. Jonen and the Wisconsin Education Association 
Council, Madison, and oral argument by Jina Jonen. 
 
For the plaintiff-appellant there was a brief by Stephen L. 
Weld II, Ryan J. Steffes, and Weld, Riley, Prenn & Ricci, S.C., 
Eau Claire, and oral argument by Stephen L. Weld II. 
 
An amicus curiae brief was filed by Bruce F. Ehlke and 
Hawks Quindel Ehlke & Perry, S.C., Madison, on behalf of AFSCME 
District Council 40. 
 
An amicus curiae brief was filed by Matthew R. Robbins, 
Yingtao Ho, and Previant, Goldberg, Uelmen, Gratz, Miller & 
Brueggeman S.C., Milwaukee, on behalf of the Wisconsin State 
AFL-CIO. 
 
An amicus curiae brief was filed by Timothy E. Hawks, 
Jeffrey P. Sweetland, B. Michele Sumara, and Hawks Quindel Ehlke 
 
 
2 
& Perry, S.C., Milwaukee, on behalf of AFT-Wisconsin, Milwaukee 
Teachers’ Education Association, and Professional Fire Fighters 
of Wisconsin, IAFF, AFL-CIO. 
 
An amicus curiae brief was filed by Roger W. Palek, 
Madison, 
on 
behalf 
of 
the 
Wisconsin 
Professional 
Police 
Association. 
 
An amicus curiae brief was filed by Henry E. Koltz and 
Schmidt, Darling & Erwin, Milwaukee, and Dennis M. Selby and 
Selby Law Firm, Mequon, on behalf of the Alternative Dispute 
Resolution Section of the State Bar of Wisconsin. 
 
An amicus curiae brief was filed by Brady C. Williamson, 
Katherine Stadler, Patricia L. Wheeler, and Godfrey & Kahn, 
S.C., Madison, on behalf of the Wisconsin REALTORS® Association. 
 
 
 
 
2009 WI 51
NOTICE 
This opinion is subject to further 
editing and modification.  The final 
version will appear in the bound 
volume of the official reports.   
No.  2008AP519  
(L.C. No. 
2007CV658) 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
Baldwin-Woodville Area School District, 
 
          Plaintiff-Appellant, 
 
     v. 
 
West Central Education Association - Baldwin 
Woodville Unit, 
 
          Defendant-Respondent-Petitioner. 
 
 
FILED 
 
JUN 17, 2009 
 
David R. Schanker 
Clerk of Supreme Court 
 
 
 
 
 
REVIEW of a decision of the Court of Appeals.  Reversed.   
 
¶1 
ANN WALSH BRADLEY, J.  The West Central Education 
Association 
- 
Baldwin-Woodville 
Unit 
seeks 
review 
of 
an 
unpublished decision of the court of appeals which reversed an 
order of the circuit court and vacated an arbitration award.1  
The court of appeals concluded that Christine Johnson was not 
entitled to back pay because she failed to file a timely 
grievance against the Baldwin-Woodville Area School District.   
                                                 
1 Baldwin-Woodville Area Sch. Dist. v. W. Cent. Edu. Ass'n, 
No. 2008AP519, unpublished slip op. (Ct. App. Oct. 21, 2008) 
(reversing an order of the circuit court for St. Croix County, 
Eric J. Lundell, J., presiding). 
No. 
2008AP519   
 
2 
 
¶2 
The Association contends that the arbitration award 
should not be vacated.  It asserts that the arbitrator's 
construction of the agreement was reasonable and not a perverse 
misconstruction.  Because we conclude that the arbitrator's 
construction of the agreement had a foundation in reason, it was 
not a perverse misconstruction.  Accordingly, we determine that 
the arbitration award should not have been vacated and we 
reverse the court of appeals.  
I 
¶3 
Christine Johnson is a full-time teacher employed by 
the Baldwin-Woodville Area School District ("the District").  
She is a member of the West Central Education Association ("the 
Association") which represents employees in negotiations with 
the District.  The Association and the District are parties to a 
collective bargaining agreement that provides for final and 
binding arbitration of disputes that arise under the agreement.   
¶4 
The arbitration provision states in part: 
It is understood that the function of the arbitrator 
shall 
be 
to 
provide 
an 
opinion 
as 
to 
the 
interpretation and application of specific terms of 
this Agreement.  The arbitrator shall not have power, 
without specific consent of the parties, to either 
advise on salary adjustments, except the improper 
application thereof, or to issue any opinions that 
would have the parties add to, subtract from, modify 
or amend any terms of this Agreement.  The decision of 
the arbitrator will be final and binding on both 
parties.     
¶5 
On June 26, 2006, the Association filed a grievance 
with the District on Johnson's behalf.  The dispute went to 
binding arbitration before a Wisconsin Employment Relations 
No. 
2008AP519   
 
3 
 
Commission arbitrator.  The subject of this appeal is the 
resulting arbitration award.  It required the District to make 
Johnson whole for the wages that she would have earned between 
2002 and 2005 had the District properly set her salary in 
accordance with the collective bargaining agreement.  The facts 
below are taken primarily from the arbitrator's findings of 
fact. 
¶6 
Johnson was first employed as a Baldwin-Woodville 
teacher in the fall of 2002.  When she initially applied for the 
position, she provided her resume to the District.  The resume 
indicated that she had a Bachelor's degree in elementary 
education and had earned an additional eleven graduate school 
credits. 
¶7 
Under the collective bargaining agreement, a teacher's 
base salary is determined by a salary schedule which fixes the 
salary based on the teacher's degree and additional graduate 
level credits.  Teachers who have attained a Bachelor's degree 
are placed at the BA + 0 lane.  Teachers who have received 
additional graduate credits are placed at advanced lanes such as 
BA + 8, BA + 16, depending on the number of graduate credits 
they have received.     
¶8 
The District initially placed Johnson at the BA + 8 
lane based on the information she provided in her application.  
This placement was reflected in the contract prepared by the 
District which Johnson signed and returned.  She was never asked 
to provide any additional information or documents verifying her 
education.     
No. 
2008AP519   
 
4 
 
¶9 
Shortly after Johnson began teaching, the District and 
the Association executed a new collective bargaining agreement.  
When Johnson signed her revised contract on October 17, 2002, 
she was unaware that it incorrectly placed her at the BA + 0 
lane, when in fact she belonged at the BA + 8 lane.  Johnson was 
paid at the BA + 0 level for the remainder of the 2002-2003 
school year, as well as for the 2003-2004 and 2004-2005 school 
years. 
¶10 In August of 2005, Johnson realized she was being 
underpaid.  On August 30, she submitted a form entitled "Request 
to Change Lanes for the 2005-2006 School Year."  The preprinted 
form addressed only the issue of earned graduate credits.  
Johnson did not make any separate back pay request at that time.  
The District approved her lane change request and placed her at 
the BA + 8 lane for the 2005-2006 school year.  It also 
increased her wages prospectively to reflect the lane change, 
but it did nothing about any back pay for the period of time 
when Johnson was paid at an incorrect level.    
¶11 Based on the testimony at the arbitration hearing, the 
arbitrator determined that it was not until May 2006 that 
Johnson realized the District had not made her whole for the 
unpaid wages.  She and an Association representative met with 
the superintendent to resolve the situation.  The superintendent 
declined to act and instead stated that he would take the matter 
to the School Board.  It subsequently voted to deny Johnson's 
request for back pay.  The date of the Board meeting is not in 
No. 
2008AP519   
 
5 
 
the record, but the arbitrator determined that Johnson did not 
learn of the Board's action until late June. 
¶12 The Association submitted a formal grievance to the 
District on June 26, 2006.  On July 17, the District denied the 
grievance "for a series of substantive and procedural reasons," 
including that the grievance was untimely.  Subsequently, 
Johnson filed several additional grievances as required by the 
collective bargaining agreement.  They were denied, and the 
Association gave notice that it was requesting final and binding 
arbitration.   
¶13 The Association stated the issue as follows:  
Did the District violate the Contractual Agreement 
between the [District] and the [Association] when it 
refused to pay back pay for the period of time in 
which Christine Johnson was paid at the incorrect lane 
on the schedule? 
The District countered with the argument that the grievance was 
untimely. 
¶14 To determine whether the grievance was timely, the 
arbitrator 
interpreted 
the 
provision 
in 
the 
collective 
bargaining agreement that sets forth the grievance procedure.  
It states in relevant part:  
Grievances shall be processed in accordance with the 
following procedure:  
Step 1  
a. An earnest effort shall first be made to settle the 
matter 
informally 
between 
the 
teacher 
and 
his 
immediate supervisor.   
b.  If the matter is not resolved, the grievance shall 
be presented in writing by the teacher or employee 
No. 
2008AP519   
 
6 
 
representative to the immediate supervisor within 
fifteen (15) days after the facts upon which the 
grievance is based first occur or first become 
known. . . . 
¶15 The District argued that the "fact[] upon which the 
grievance is based" was Johnson's placement at the incorrect pay 
lane, and that she was aware of the District's mistake in August 
2005.  The arbitrator acknowledged the District's argument but 
determined that this was not the fact upon which the grievance 
was based.  Instead, he concluded: "the fact which the grievant 
is challenging is the District's denial of back pay, not the 
District's initial placement of Johnson in the BA lane."   
¶16 The arbitrator concluded that in August 2005, the 
District implicitly acknowledged that Johnson had been entitled 
to BA + 8 status all along and that she "could reasonably have 
expected that the District would rectify its error by making her 
whole."  He determined that the critical event was the decision 
to deny Johnson's request for back pay: "It is thus the Board's 
action rejecting Johnson's request that is the critical event in 
the processing of this grievance[.]"   
¶17 The arbitrator found that Johnson learned of the 
Board's decision in "late June."  He concluded that Johnson's 
June 26 grievance was filed within 15 days of when Johnson 
learned that the Board had decided to deny her request for back 
pay.  Therefore, he determined that the grievance was timely. 
¶18 The arbitrator also concluded that Johnson's placement 
at the BA + 0 lane was in violation of the collective bargaining 
No. 
2008AP519   
 
7 
 
agreement.2  He ordered the District to "make Christine Johnson 
whole for the wages she would have earned had she been 
maintained at the BA + 8 lane for the 2002-03, 2003-04 and 2004-
05 school years." 
¶19 The District sought judicial review of the arbitration 
award.  The circuit court denied the District's motion to vacate 
the award.  On appeal, the court of appeals reversed the circuit 
court and remanded with instructions that the award be vacated. 
II 
¶20 The role of the court in reviewing an arbitration 
award is essentially supervisory in nature.  Racine County v. 
Int'l Ass'n Machinists & Aerospace Workers, 2008 WI 70, ¶11, 310 
Wis. 2d 508, 751 N.W.2d 312.  We are to ensure that the parties 
received what they bargained for when they agreed to resolve 
their disputes through final and binding arbitration.  Id.  
Courts are guided by the statutory standards in Wis. Stat. 
§§ 788.10 (2007-08)3 and 788.114 and by the standards developed 
                                                 
2 The District does not challenge this conclusion.   
3 Wis. Stat. § 788.10(1) reads: 
In either of the following cases the court . . . 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 a hearing, . . . or 
No. 
2008AP519   
 
8 
 
at common law.  Lukowski v. Dankert, 184 Wis. 2d 142, 150-51, 
515 N.W.2d 883 (1994).  We give deference to the arbitrator's 
factual and legal conclusions.   City of Madison v. Madison 
Prof'l Police Officers Ass'n, 144 Wis. 2d 576, 585, 425 N.W.2d 8 
(1988).  If the common law and statutory standards are not 
violated, the court should affirm the arbitrator's award.  
Lukowski, 184 Wis. 2d at 151. 
                                                                                                                                                             
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.  
All subsequent references to the Wisconsin Statutes are to 
the 2007-08 version unless otherwise indicated. 
4 Wis. Stat. § 788.11(1) reads: 
In either of the following cases the court . . . must 
made an order modifying or correcting the award upon 
the application of any party to the arbitration: 
 
(a) 
Where 
there 
was 
an 
evident 
material 
miscalculation of figures or an evident material 
mistake in the description of any person, thing or 
property referred to in the award; 
 
(b) Where the arbitrators have awarded upon a 
matter not submitted to them . . . ; 
 
(c) Where the award is imperfect in matter of 
form not affecting the merits of the controversy. 
No. 
2008AP519   
 
9 
 
¶21 Courts will vacate an award when arbitrators exceeded 
their 
powers 
through 
"perverse 
misconstruction,"5 
positive 
misconduct, a manifest disregard of the law,6 or when the award 
is illegal or in violation of strong public policy.  Racine 
County, 310 Wis. 2d 508, ¶11 (citing Wis. Stat. § 788.10(1)(d)); 
Lukowski, 184 Wis. 2d at 149.  This case calls upon the court to 
determine whether the arbitrator exceeded his authority by 
perversely misconstruing the collective bargaining agreement.   
¶22 In reviewing this award, we do not determine which 
construction——the 
arbitrator's 
or 
the 
District's——is 
more 
reasonable.  See Lukowski, 184 Wis. 2d at 153 ("[T]his court 
will not upset the award even if this court might have decided 
the matter differently.")  Instead, we will uphold an award if 
there is "some reasonable foundation for the interpretation of 
the contract offered in the decision."  Id.   
¶23 When there is no contractual language that would allow 
for the arbitrator's construction, there is no reasonable 
foundation for the award.  Lukowski, 184 Wis. 2d at 153.  In 
such a case, the arbitrator perversely misconstrues the contract 
and exceeds the authority granted by the collective bargaining 
                                                 
5 See, e.g., City of Oshkosh v. Oshkosh Pub. Library 
Clerical & Maint. Employees, 99 Wis. 2d 95, 106, 299 N.W.2d 210 
(1980); Winkelman v. Kraft Foods, Inc., 2005 WI App 25, ¶7, 279 
Wis. 2d 335, 693 N.W.2d 756. 
6 See, e.g., Racine County v. Int'l Ass'n Machinists & 
Aerospace Workers, 2008 WI 70, ¶11, 310 Wis. 2d 508, 751 N.W.2d 
312; Lukowski v. Dankert, 184 Wis. 2d 142, 149, 515 N.W.2d 883 
(1994); City of Madison v. Madison Prof'l Police Officers Ass’n, 
144 Wis. 2d 576, 586, 425 N.W.2d 8 (1988). 
No. 
2008AP519   
 
10 
 
agreement.  City of Oshkosh v. Oshkosh Pub. Library Clerical & 
Maint. Employees, 99 Wis. 2d 95, 106, 299 N.W.2d 210 (1980).  
Whether an arbitrator has exceeded his authority by perversely 
misconstruing the parties' agreement is a question of law that 
this court reviews independently of the determinations rendered 
by the circuit court and the court of appeals.  Racine County, 
310 Wis. 2d 508, ¶11. 
III 
¶24 We recently reviewed an arbitration award in Racine 
County, 310 Wis. 2d 508.  There, we determined that the award 
"raise[d] substantial separation of powers concerns" and that 
the arbitrator "exhibited a manifest disregard for the law by 
making no attempt to apply or interpret" a statutory provision 
that directly conflicted with the award.  Id., ¶¶23, 33.  Thus, 
we concluded that the arbitrator had exceeded her authority and 
we vacated the award.  Id., ¶¶34, 36.   
¶25 This case is quite unlike Racine County.  Here, there 
is no claim that the arbitrator's award raises a constitutional 
concern or conflicts with a governing statute.  Instead, the 
District claims that the arbitrator's award conflicts with the 
collective bargaining agreement freely negotiated between two 
parties with equal bargaining power.  In a case such as this, 
the arbitrator derives his authority from the parties' contract.  
"The arbitrator is free to give his own construction to 
ambiguous language in the collective bargaining agreement but he 
is 
without 
authority 
to 
disregard 
or 
modify 
plain 
and 
unambiguous provisions."  City of Milwaukee v. Milwaukee Police 
No. 
2008AP519   
 
11 
 
Ass'n, 97 Wis. 2d 15, 27, 292 N.W.2d 841 (1980).  The award will 
be upheld if there is some reasonable foundation in the contract 
language for the award.  Lukowski, 184 Wis. 2d at 153.   
¶26 Here, the arbitrator recognized that the limitations 
provision would bar arbitration of the grievance if "the facts 
upon which the grievance was based" were known to Johnson more 
than 15 days before June 26, 2006, the day she filed the 
grievance.  Thus, the arbitrator was required to apply this 
language to the facts to determine what facts the grievance was 
based upon and when those facts became known. 
¶27 This court has remarked, "rare will be the case when a 
party aggrieved by an award will not view the arbitrator's 
opinion as adding to, subtracting from, or otherwise modifying 
the collective bargaining agreement."  City of Oshkosh, 99 
Wis. 2d 
at 
105. 
 
Nevertheless, 
when 
an 
arbitrator's 
interpretation of a negotiated agreement has a foundation in 
reason, "[i]t would be contrary to a policy which favors the 
final resolution of labor disputes through arbitration to afford 
a litigant a review of the merits of an arbitral decision[.]"  
Id.    
¶28 The District acknowledges that if the arbitrator's 
construction of the limitations provision in this case has a 
foundation in reason, the award cannot be vacated.  It contends, 
however, that the arbitrator's construction is unreasonable 
because he ignored the unambiguous language of the grievance 
procedure outlined in the collective bargaining agreement when 
he determined that Johnson's grievance was timely.  The District 
No. 
2008AP519   
 
12 
 
asserts that the language of the provision——"the facts upon 
which the grievance is based"——is plain and unambiguous, and 
there is nothing ambiguous "about how [the provision] applied to 
the undisputed facts of the case." 
¶29 The essence of the dispute presents the question of 
which facts trigger the limitation.  To prevail, the District 
must show that there was no foundation in reason for the 
arbitrator's construction that the "fact[] upon which the 
grievance is based" was the District's denial of back pay in 
June of 2006.   
¶30 Under the District's interpretation of the collective 
bargaining 
agreement, 
the 
triggering 
event 
is 
Johnson's 
realization that she had been underpaid.  The District has 
advanced alternative dates when this event could have occurred.  
The District has argued that this event occurred in August 2005, 
when she filed a request to change lanes.  However, at oral 
argument, the District contended that at the latest, the 
triggering event occurred in September:  
In September of 2005, when [Johnson] request[s] [] the 
movement and [she] knows she was improperly paid, 
that's the trigger.  That's when she knows the 
underlying facts.  That's when she has to file her 
grievance. . . . The board didn't pay her the back 
pay . . . She obviously wasn't getting the money in 
terms of back pay.  She didn't get her money in the 
first payroll; she didn't get her money in the second 
payroll, she didn't get her money in the fifteenth 
payroll.   
¶31 In its brief to the circuit court the District 
selected a different date on which Johnson was aware of the 
No. 
2008AP519   
 
13 
 
facts underlying the grievance.  It argued that "the 'grievable' 
event with respect to [Johnson's] placement on the salary 
schedule occurred in October 2002" when she was initially placed 
at the BA + 0 lane.  The District continued: 
Even if the Court accepts [Johnson's] argument that 
signing the 2002-03, 2003-04, and 2004-05 individual 
employment contracts, all clearly setting out her 
placement on the BA + 0 credits lane, somehow does not 
prove that [Johnson] "knew" of her salary grid 
placement for those three years, her August 2005 
request for a change to the BA + 8 lane demonstrates 
that 
she 
knew 
of 
the 
allegedly 
incorrect 
lane 
placement at that time. 
¶32 The District has offered several possible dates for 
the triggering event, all of them contrary to the arbitrator's 
determination that the triggering event occurred when the Board 
decided to deny Johnson's back pay.7  In reviewing this award, we 
do not determine which construction is the most reasonable.  
Lukowski, 184 Wis. 2d at 153.  Instead, we simply examine 
whether the determination that the arbitrator made had "some 
reasonable foundation."  Id.   
¶33 The arbitrator reasoned that Johnson was not aware 
that she had a grievance with the District in August 2005 
because 
"she 
could 
have 
reasonably 
expected 
that 
the 
District . . . [would make] her whole."  When she brought the 
matter to the attention of the superintendent in May 2006, she 
                                                 
7 Despite offering several different dates, the District has 
never asserted that the fact triggering the grievance occurred 
in May 2006, the date selected by the dissent as the latest date 
on which the facts underlying the grievance became known.  See 
dissent, ¶46.   
No. 
2008AP519   
 
14 
 
still did not know that the District would refuse to grant her 
request for back pay.  The arbitrator determined that Johnson 
did not know that she had a grievance with the District until 
she was aware that the District had made a decision to deny back 
pay.   
¶34 He stated: 
The District contends the grievance failed to conform 
with Step 1(b), Section C, Article VI, which requires 
that the grievance "be presented in writing . . . to 
the immediate supervisor within fifteen (15) days 
after the facts upon which the grievance is based 
first occur or first become known." 
I find that this clause does not prevent consideration 
of this grievance.  First, the fact which the grievant 
is challenging is the District's denial of back pay, 
not the District's initial placement of Johnson in the 
BA lane. . . . It is thus the Board's action rejecting 
Johnson's request that is the critical event in the 
processing of this grievance. . . . 
Because the District has failed to provide any 
evidence at all that the District's action rejecting 
Johnson's request for back pay was more than 15 days 
prior to June 26, the provisions of Article VI, 
Section C, Step 1(b) do not make this matter untimely. 
¶35 Upon review of the arbitrator's decision, we conclude 
that his construction of the limitation provision had a 
foundation in reason.  Our obligation is not to review the 
merits of the award,8 but rather to ensure that the parties have 
                                                 
8 The dissent provides an argument about the merits of the 
grievance, concluding that the terms of the agreement were 
"plain" and that the fact underlying the grievance was that 
Johnson had been placed at the wrong pay lane.  Dissent, ¶¶39, 
47.  The dissent's analysis exceeds the limited standard of 
review for arbitration awards.    
No. 
2008AP519   
 
15 
 
received what they bargained for——resolution of the labor 
dispute within the terms of the collective bargaining agreement 
and by an arbitrator who has not exceeded his authority by going 
beyond the terms of the contract.  
¶36 The court of appeals, however, concluded that the 
"arbitrator's construction of the fifteen-day time limit for 
filing grievances was a perverse misconstruction because it was 
contrary to the collective bargaining agreement's plain and 
unambiguous terms." Baldwin-Woodville Area Sch. Dist. v. W. 
Cent. Edu. Ass'n, ¶12, No. 2008AP519, unpublished slip op. (Ct. 
App. Oct. 21, 2008).  It determined that the "fact underlying 
the grievance was that [Johnson] was paid in the wrong 
compensation lane for most of the 2002-03 through 2004-05 school 
years."  Id., ¶14.  Therefore, the court concluded that to be 
timely, the grievance "was required to be filed within fifteen 
days of when this fact occurred or became known."  Id. 
                                                                                                                                                             
There are good reasons for not relitigating the merits of 
the award upon judicial review.  We recognize the dissent's 
concern that the arbitrator's determination allowed Johnson to 
maintain a stale claim.  See dissent, ¶51.  Nonetheless, we are 
persuaded by the amicus brief of the Alternative Dispute 
Resolution Section of the State Bar of Wisconsin: "The viability 
of arbitration as an alternative dispute resolution method 
relies upon the process being expedient, fair, and final.  If 
participants are unsure that their dispute will be decided with 
finality, the presumptive result is that fewer persons will 
submit to arbitral determination, and will instead commence 
court-based litigation."  When parties with equal bargaining 
power agree to be bound by the arbitrator's construction of 
contract terms, courts refrain from reviewing the merits of the 
award under most circumstances.  
No. 
2008AP519   
 
16 
 
¶37 As discussed above, we cannot agree with the court of 
appeals that the contract unambiguously allowed for only one 
possible construction.   The court of appeals never considered 
whether the arbitrator's construction of the contract had a 
foundation in reason.  Instead, while paying lip service to the 
deferential standard of review afforded to arbitration awards, 
the court of appeals substituted its own preferred construction 
of "the facts underlying the grievance."  The court of appeals' 
construction of the contract language may well be reasonable, 
but the court's analysis does not comport with the limited 
standard of review for arbitration awards.9  
¶38 Because we conclude that the arbitrator's construction 
of the agreement had a foundation in reason, it was not a 
perverse misconstruction.  Accordingly, we determine that the 
                                                 
9 In 
this 
case, 
six 
amicus 
briefs 
were 
filed 
by 
organizations 
whose 
members 
frequently 
participate 
in 
arbitration: the Alternative Dispute Resolution Section of the 
State Bar of Wisconsin; the Wisconsin Professional Police 
Association; the Wisconsin State AFL-CIO; the Wisconsin Realtors 
Association; the AFT-Wisconsin, Milwaukee Teachers' Education 
Association and Professional Fire Fighters of Wisconsin, IAFF, 
AFL-CIO; and the AFSCME District Council 40.   
All six amici argued that the court of appeals' analysis 
expanded the "perverse misconstruction" standard and undercut 
the presumption of finality in arbitration awards.  The amici 
uniformly expressed concern that if allowed to stand, the court 
of appeals' analysis would reduce the viability of arbitration 
as an efficient means of resolving disputes in Wisconsin. 
No. 
2008AP519   
 
17 
 
arbitration award should not have been vacated and we reverse 
the court of appeals.10 
By the Court.— The decision of the court of appeals is 
reversed.  
 
 
 
                                                 
10 We note that the arbitrator's award stated that "[t]he 
district may structure the payments as it finds necessary, 
provided Johnson is made whole by December 31, 2008."  This 
deadline elapsed as the parties pursued judicial review.  The 
parties have not requested that we set a new deadline for 
payment and we therefore make no determination about the issue 
here. 
No.  2008AP519.dtp 
 
1 
 
¶39 DAVID T. PROSSER, J.   (dissenting).  The majority 
opinion reverses a unanimous court of appeals decision that 
vacated the arbitration award in this case.  The majority 
concludes "that the arbitrator's construction of the [collective 
bargaining] agreement had a foundation in reason" and was 
therefore not a perverse misconstruction of the agreement.  
Majority op. ¶¶2, 38.  I recognize and have no disagreement with 
the majority's explanation of the well-settled legal rules, 
principles, 
and 
standards 
that 
govern 
the 
judiciary's 
supervisory role in reviewing arbitration decisions.  See id., 
¶¶20-23.  However, I cannot join the majority opinion because 
the arbitrator's decision on the timeliness of the formal 
grievance presented on June 26, 2006, in relation to when the 
grievant first knew "the facts upon which the grievance was 
based" effectively amended the plain terms of the grievance 
procedure set forth in the agreement and therefore was a 
perverse misconstruction of the agreement.  See Nicolet High 
Sch. Dist. v. Nicolet Educ. Ass'n, 118 Wis. 2d 707, 713-14, 348 
N.W.2d 175 (1984) (stating that the arbitrator may not amend the 
agreement "to dispense his own brand of justice" because his 
power is derived from and therefore limited by the terms of the 
agreement); City of Milwaukee v. Milwaukee Police Ass'n, 97 
Wis. 2d 15, 26-27, 292 N.W.2d 841 (1980) ("If the arbitrator in 
effect undertook to amend the contract . . . the award will be 
vacated. . . .  [H]e is without authority to disregard or modify 
plain and unambiguous provisions.") (citations omitted); see 
also City of Oshkosh v. Oshkosh Pub. Library Clerical & Maint. 
No.  2008AP519.dtp 
 
2 
 
Employees 
Union 
Local 
796-A, 
99 
Wis. 2d 95, 
106-07, 
299 
Wis. 2d 210 (1980) ("[W]hen a court declines to enforce an award 
on the basis of perverse misconstruction, the court may be 
viewed as protecting the bargain of the parties and insuring the 
integrity of the arbitration process.").   
¶40 Consequently, the court of appeals' decision to vacate 
the arbitration award should be affirmed.  
I 
¶41 In this case, the grievant's contractual rights were 
violated by the school district beginning in October 2002 when 
it placed her in the wrong pay category, referred to as a "pay 
lane."  The grievant purportedly did not "realize" this error 
until August 2005, even though her paycheck actually decreased 
in October 2002 and she signed separate "Teacher Contract[s]" 
for each of the three school years at issue that clearly 
misstated her pay lane.1  See majority op. ¶¶9-10.  In August 
2005, she submitted a "Request to Change Lanes for the 2005-06 
School Year" form.  (Emphasis added.)  This form, as its title 
                                                 
1 The grievant signed two contracts for the 2002-03 school 
year.  The first, which was signed on August 15, 2002, stated 
the correct pay lane at the top of the contract in bold 
lettering, and it was underlined.  A new collective bargaining 
agreement was then approved, and the grievant was required to 
sign a new contract for the 2002-03 school year.  She did so on 
October 17, 2002.  However, at the top of this contract, 
underlined and in bold lettering, the grievant's pay lane was 
misstated and her base salary was $660 less than the stated 
salary on her previous 2002-03 contract.  On April 22, 2004, the 
grievant signed her 2003-04 contract; and on May 20, 2004, the 
grievant signed her 2004-05 contract.  The 2003-04 and 2004-05 
contracts both misstated the grievant's pay lane in the same 
manner. 
No.  2008AP519.dtp 
 
3 
 
states, is used for teachers requesting that their pay lane be 
modified for the upcoming school year.  It says nothing about 
adjusting the teacher's compensation for previous years.  The 
form was not designed for that purpose.  In fact, the form was 
designed to facilitate a provision in the agreement that 
requires teachers to submit evidence of their "increased 
professional 
preparation," 
i.e., 
graduate 
school 
education 
credits, so that their pay lane adjustment can be approved in 
September for that school year.  Therefore, while the grievant 
knew in August 2005 that she had been paid incorrectly for the 
past three school years, she did not request back pay for those 
years when she submitted her request to change pay lanes. 
¶42 The grievant claims that in May 2006, she realized for 
the first time that her "Request to Change Lanes for the 2005-06 
School Year" was granted for the 2005-06 school year but that 
she had not been made whole for the underpayment of her salary 
in the previous school years.  Nonetheless, she did not file a 
formal grievance or contact her immediate supervisor as the 
grievance procedure in the agreement demands.  Instead, she and 
a 
union 
representative 
met 
with 
the 
school 
district's 
superintendent who forwarded the matter to the school board.  
The grievant's informal request for back pay was then denied by 
the school board some time in "late June" 2006.  Thereafter, on 
June 26, 2006, for the first time, the grievant filed a formal 
grievance. 
¶43 On July 17, 2006, the school district denied the 
formal grievance for several reasons, one being that it was 
No.  2008AP519.dtp 
 
4 
 
untimely because it was submitted more than 15 days after the 
grievant first knew of the facts upon which her formal grievance 
for back pay was based.  According to the grievance procedure 
set forth in the agreement, an initial formal grievance must "be 
presented in writing by the teacher or employee representative 
to the immediate supervisor within fifteen (15) days after the 
facts upon which the grievance is based first occur or first 
become known."  (Emphasis added.)  A second formal grievance was 
submitted in late July 2006, and it was also denied by the 
school board.  Ultimately, in accordance with the agreement, the 
parties agreed to submit the dispute to arbitration. 
¶44 In his arbitration award, the arbitrator found that 
the formal grievance submitted on June 26, 2006, was timely and 
that the school district had violated the grievant's rights 
under the agreement by incorrectly placing her in the wrong pay 
lane for three school years (2002-03, 2003-04, and 2004-05).  In 
terms of timeliness, the arbitrator determined that the grievant 
was challenging the school board's decision to deny her informal 
back pay request in "late June" 2006.  The arbitrator reasoned 
that because the grievant filed her formal grievance less than 
15 days after the school board's decision, the formal grievance 
was not untimely.  This construction of the agreement's 
grievance procedure is, I believe, perverse and should not be 
upheld by this court, despite the judiciary's limited role in 
reviewing arbitration awards. 
No.  2008AP519.dtp 
 
5 
 
II 
¶45 In this case, we are reviewing the arbitrator's 
determination that "the fact[] upon which the [formal] grievance 
is based" is the school board's June 2006 decision denying the 
grievant's informal request for back pay.  For the arbitrator's 
award to have any foundation in reason, the same June 26 formal 
grievance for back pay could not have been submitted prior to 
the school board's decision.2  If the same formal grievance could 
have been submitted prior to the school board's decision, then 
the school board's denial of the grievant's informal request for 
back pay cannot be "the fact[] upon which the [formal] grievance 
[wa]s based."  Because the same formal grievance could have been 
submitted prior to the school board's decision, "the facts upon 
which the [formal] grievance is based" must have "first become 
known" to the grievant before the school board's decision in 
"late June" 2006.  Several reasons support this conclusion. 
¶46 The most elementary reason is the fact that the 
grievant's informal request for back pay in May 2006, which the 
superintendant forwarded to the school board, is substantively 
the same request the grievant made in her formal grievance.  In 
both instances, the grievant requested that she be made whole 
for the school years she was compensated according to the 
incorrect pay lane.  Logically, it would have been impossible 
for the grievant not to have known of the facts upon which the 
formal grievance for back pay was based when she made her 
                                                 
2 The agreement states that "a grievance is any complaint 
regarding the interpretation or application of a specific 
provision of" the agreement. 
No.  2008AP519.dtp 
 
6 
 
informal request in May 2006.  Otherwise, she would have made no 
informal request for back pay.  Therefore, the grievant must 
have "first known" of the underlying "facts upon which the 
[formal] grievance [was] based," at the very latest, in May 
2006, which is more than 15 days before the formal grievance was 
filed on June 26.3  See Baldwin-Woodville Area Sch. Dist. v. W. 
Cent. Educ. Ass'n, No. 2008AP519, ¶15, unpublished slip op. (Ct. 
App. Oct. 21, 2008) ("Based on the arbitrator's findings, the 
latest possible point at which this fact became known was when 
[the grievant] realized in May[] 2006 that the [school district] 
was not making her whole for the salary she would have 
earned[.]") (internal quotations omitted).    
                                                 
3 Even if we assume the grievant did not know of the facts 
giving rise to her formal grievance for back pay until the last 
day in May 2006, the grievant would have been required to file 
her formal grievance, at the latest, by June 21, 2006 (the 
agreement instructs that weekends and holidays are not included 
in computing time limits). 
The majority notes the school district "never asserted that 
the fact triggering the [formal] grievance occurred in May 2006, 
the date selected by the dissent as the latest date on which the 
facts underlying the [formal] grievance became known."  Majority 
op., ¶32 n.7.  This statement is not pertinent to the issue in 
this case——whether the arbitrator's interpretation is a perverse 
misconstruction of the agreement.  See id., ¶¶21-23.  As the 
majority states, "In reviewing this award, we do not determine 
which construction——the arbitrator's or the [school d]istrict's—
—is more reasonable."  Id., ¶22.  The school district is not 
asking that we make a determination of when the grievant first 
knew of the facts upon which her formal grievance for back pay 
was based.  Rather, it is asking that we determine whether the 
arbitrator's award was arrived at by a perverse misconstruction 
of the underlying agreement.  The purpose of focusing on May 
2006 is to show that there is no plausible interpretation of the 
facts that would permit the arbitrator to conclude the grievant 
first knew of the facts underlying her formal grievance for back 
pay any later than May 2006.   
No.  2008AP519.dtp 
 
7 
 
¶47 Additionally, the agreement requires that a formal, 
written grievance set forth the specific grievance and the facts 
upon which it is based.  In this case, the formal grievance 
submitted on June 26, 2006, makes two allegations against the 
school district.  The first allegation reads as follows: 
By its actions, it is my contention that the [school 
district] violated Schedules A and B of the 2003-2005 
Collective Bargaining Agreement and Article IX – 
Section A of the 2005-2007 Collective Bargaining 
Agreement by placing [the grievant] in a pay category 
of the salary schedule lower than the one she had been 
placed in when hired by the [school district]. 
(Emphasis added.)  The formal grievance also states that 
reducing 
the 
grievant 
"a 
lane 
for 
no 
disciplinary 
reason . . . was a breach of both the terms of her acceptance of 
employment . . . and 
the 
Collective 
Bargaining 
Agreement."  
Therefore, it is clear that the formal grievance alleged that 
the school district's placement of the grievant in the wrong pay 
lane beginning in 2003 was the breach of the agreement.4  As a 
result, it would be impossible to declare, as the arbitrator 
does, that the "fact[] upon which the [formal] grievance is 
based" was the school board's decision to deny the grievant's 
informal request for back pay in June 2006, because the school 
                                                 
4 Notably, the grievant was placed in the wrong pay lane 
beginning in October 2002, but the formal grievance makes no 
reference to 2002.  See supra, ¶3; majority op., ¶9.  The 
arbitrator, however, disregarded the grievant's omission of that 
fact and awarded her back pay for the entire 2002-03 school 
year.  Majority op., ¶¶5, 18.  
No.  2008AP519.dtp 
 
8 
 
board's denial occurred years after the events alleged in the 
formal grievance.5 
¶48 The second alleged violation presented in the June 26 
formal grievance states the following: 
By its actions, it is my contention that the [school 
district] violated Article VI – Grievance Procedure 
when the [s]uperintendent relinquished his obligation 
to settle the matter informally by either correcting 
the error or declining to correct the error and 
allowing the grievant to pursue the matter to the next 
level.  By unilaterally taking the matter to the 
[s]chool 
[b]oard, 
the 
administration 
usurped 
the 
grievant's right to petition the [s]chool [b]oard on 
the matter and expect an impartial review.[6] 
(Emphasis added.)  By its very terms, this allegation recognizes 
the existence of a grievance in May 2006 when the grievant 
brought 
her 
complaint 
informally 
to 
the 
superintendant.  
Otherwise, the grievant could not have alleged a violation of 
the "Grievance Procedure" that prohibited her from "pursu[ing] 
                                                 
5 The majority asserts that this dissent makes an argument 
on the merits of the grievance and accuses it of "concluding 
that . . . the fact underlying the grievance was that [the 
grievant] had been placed at the wrong pay lane."  Majority op., 
¶35 n.8.  The majority, however, fails to appreciate that this 
is what the grievant alleged in her formal grievance.  The 
grievant could not have made more clear the facts upon which her 
formal grievance was based:  
[I]t is my contention that the [school district] 
violated Schedules A and B of the 2003-2005 Collective 
Bargaining Agreement and Article IX – Section A of the 
2005-2007 Collective Bargaining Agreement by placing 
[the grievant] in a pay category of the salary 
schedule lower than the one she had been placed in 
when hired by the [school district]. 
6 This alleged violation was not submitted for arbitration, 
but the arbitrator had a copy of the formal grievance when he 
determined the award. 
No.  2008AP519.dtp 
 
9 
 
the matter to the next level [of the Grievance Procedure]."  
(Emphasis added.)  Therefore, because the formal grievance 
submitted on June 26, 2006, expressly recognizes the existence 
of a grievance in May 2006, there is no foundation in reason for 
the arbitrator to have stated that the "facts upon which the 
[formal] grievance is based" were not known by the grievant 
until "late June" 2006. 
¶49 Finally, both the majority opinion and the arbitration 
award expressly recognize that the grievant "realized" in May 
2006 that she had not been awarded back pay for the three school 
years she was paid according to the incorrect pay lane.  See 
majority op. ¶11.  Because she "realized" at that time the 
school district had not made her whole, she knew the facts upon 
which her formal grievance for back pay was based at that time 
as well.  It is a complete fallacy to say that the grievant 
"realized" she was not receiving back pay for the period at 
issue in May 2006, but that the factual basis for her formal 
grievance regarding that back pay was not first known until the 
school board denied her informal request for the back pay.  In 
other words, it is a perverse misconstruction of the agreement 
to say the grievant "realized" the basis for her formal 
grievance for back pay in May, but "the facts upon which the 
[formal] grievance" for back pay "first bec[a]me known" occurred 
in "late June."  
¶50 Given the circumstances, there is no doubt the 
arbitrator acted in an equitable manner so that the grievant 
could be justly compensated.  I do not dispute that the grievant 
No.  2008AP519.dtp 
 
10 
 
was wronged.  However, because the arbitrator derives his power 
from the agreement itself, he cannot ignore, modify, or amend 
the plain language of the agreement.  Nicolet, 118 Wis. 2d at 
713-14; Milwaukee Police Ass'n, 97 Wis. 2d at 25-27.7  The 
arbitrator's award yields the same outcome as if the 15-day time 
limit to file the first formal grievance had been disregarded 
completely, nullifying the requirement for timely grievances.  
Thus, this is a perverse misconstruction of a collective 
bargaining agreement "freely negotiated between two parties with 
equal bargaining power."  Majority op. ¶25. 
¶51 By allowing an arbitrator to determine that the facts 
upon which a grievance is based do not become known to the 
grievant until an identical informal complaint made by the same 
grievant is denied, this court is opening the door to the 
arbitration of stale claims.  Under the arbitrator's and the 
majority's reasoning, a grievant is effectively permitted to 
file an informal complaint, wait for the resolution, and if the 
grievant finds the resolution unfavorable, she can file a formal 
grievance and try again for the same relief.  This is an 
                                                 
7 The majority accuses the court of appeals of "paying lip 
service to the deferential standard of review afforded to 
arbitration awards."  Majority op., ¶37.  The majority, however, 
"pay[s] lip service" to the standard of review set forth in 
Nicolet High School District v. Nicolet Education Association, 
118 Wis. 2d 707, 713-14, 348 N.W.2d 175 (1984) and City of 
Milwaukee v. Milwaukee Police Association, 97 Wis. 2d 15, 26-27, 
292 N.W.2d 841 (1980), which state that the arbitrator is not 
free to modify or amend the terms of the agreement he is 
construing.  Despite reciting this standard, the majority fails 
to apply it to this case, where the arbitrator has substantially 
modified the requirements of the grievance procedure set forth 
in the agreement he construed.  
No.  2008AP519.dtp 
 
11 
 
unreasonable interpretation and a perverse misconstruction of 
the agreement. 
¶52 For the reasons stated, I respectfully dissent. 
 
 
No.  2008AP519.dtp 
 
1