Opinion ID: 2102261
Heading Depth: 1
Heading Rank: 9

Heading: The Reasonable Relationship Test

Text: In the two cases before us, there is no dispute as to the first step. Both sides have recognized the subject matter as arbitrable. As for the second step, the courts below assessed the Associations' claims and ruled that they were not arbitrable. In both cases, and in the face of broad arbitration clauses, they addressed the nature of the dispute, and, acting as would an arbitrator, interpreted the scope of the substantive provision of the contract. They then found the grievances to be outside of the parties' agreement to arbitrate. This was error. A court confronted with a contest of this kind should merely determine whether there is a reasonable relationship between the subject matter of the dispute and the general subject matter of the CBA. If there is none, the issue, as a matter of law, is not arbitrable. If there is, the court should rule the matter arbitrable, and the arbitrator will then make a more exacting interpretation of the precise scope of the substantive provisions of the CBA, and whether the subject matter of the dispute fits within them (see, Board of Educ. v Barni, 49 NY2d 311, supra; see also, Matter of Nationwide Gen. Ins. Co. v Investors Ins. Co., 37 NY2d 91, 95). The parties in the cases before us chose to arbitrate any alleged violation of the CBA or any dispute with respect to its meaning or application. Given a clause of this breadth, and the presence of language dealing specifically with health insurance benefits, we determine that the reduction of benefits by increasing the employees' copayments was an arbitrable issue. We reach this conclusion even though, as the District stresses, it was the Plan, a nonparty, that reduced the benefits. The Districts assert that even though the Plan is governed by a Board of Trustees comprised of District CEOs, the Districts do not control the amount or type of health insurance benefits that the Plan provides. Whether this is so, and whether the District violated the CBA with regard to maintaining a certain level of benefits, is for the arbitrator (Matter of Board of Educ. v Deer Park Teachers Assn., 50 NY2d 1011; Board of Educ. v Barni, 49 NY2d 311, supra; see also, Matter of American Bosch Arma Corp. [Stewart], 15 NY2d 840). We have considered Indian River Central School District's remaining argument in support of a stay of arbitration, and find it to be without merit. Accordingly, in each proceeding, the order of the Appellate Division should be reversed, with costs, the petition to stay arbitration denied and the cross application to compel arbitration granted. In each proceeding: Order reversed, etc.