Court Opinion

ID: 9692974
Source: CourtListenerOpinion
Date Created: 2023-08-25 16:14:28.414061+00
Date Added: 2024-06-11T18:19:38.597696
License: Public Domain

SHIRLEY S. ABRAHAMSON, J.
(dissenting). Dutifully applying Richco Structures v. Parkside Village, Inc., 82 Wis. 2d 547, 263 N.W.2d 204 (1978), the court of appeals affirmed the arbitrator’s award. In contrast, the majority tosses out Richco Structures, announces a new interpretation of the statute, and vacates the award that so outraged the sensibilities of the trial court. I dissent.
First, the Richco Structures full disclosure-harmless error test used to vacate an award on the basis of "evident partiality,” sec. 788.10(l)(b), Stats. 1985-86, is a well-accepted test and it works. Second, the arbitrator made full disclosure of his past employment history to the Wisconsin Employment Relations Commission, which the parties had empowered to appoint the arbitrator, and the Commission’s decision to appoint this arbitrator was reasonable.
I.
Euphemistically claiming that it is "modifying the requirements of Richco Structures" (majority *274opinion at page 10), the majority overrules Richco Structures and changes this court’s interpretation of sec. 788.10(l)(b). It is elementary that this court will generally "stand by things decided.” Stare decisis includes,- of course, room for the growth that is inherent in the common law. Although this case involves statutory interpretation rather than common law adjudication, growth occurs in statutory interpretation as well. This court, however, does not generally overrule its interpretation of a statute. The canon of interpretation usually applied is that the legislature has accepted the court’s interpretation when it does not amend a statute interpreted by the court. On occasion, the court will overrule its prior interpretation of a statute, when it concludes that its original interpretation was erroneous. See State v. Smith, 113 Wis. 2d 497, 335 N.W.2d 376 (1983). The decision to depart from precedent — whether in a common law or statutory adjudication — is not a casual one; any such decision must be open and must be explained. This insures that the court is responding to a felt need and not to caprice. The majority in this case overrules this court’s interpretation of sec. 788.10(l)(b) without explaining the necessity for its departure from its earlier interpretation of the statute.
The majority has adopted a new interpretation of sec. 788.10(l)(b): Any time an arbitrator fails to disclose past employment with a party or an entity that supplies counsel to a party, there is evident partiality and the award must be vacated.
The majority equates the words "evidence of possible partiality” with the statutory phrase "evident partiality,” thereby amending the statutory test with a play on words. The majority is saying that if there is any evidence, that is, any undisclosed fact, that tends *275to make the existence of partiality possible, then there is "evidence of possible partiality,” which equals "evident partiality.” The majority then concludes that since an undisclosed prior employment relationship is always evidence of possible partiality, an undisclosed prior employment relation is evident partiality per se. No matter how remote in time the employment was, how limited the length of employment, or how removed the nature of the past employment from the circumstances in the case, the same inflexible per se rule requires vacating the arbitration award for the arbitrator’s failure to disclose the prior employment.
This per se rule is inappropriate. It has no foundation in sec. 788.10(l)(b), Stats. 1985-86, or in principles of jurisprudence.
The Richco Structures test is similar to that used in the federal system and in other states that have statutes comparable to sec. 788.10(l)(b). The Richco court admonished arbitrators to make full disclosure at the outset of arbitration of relationships and transactions they have had with the parties or representatives of the parties to the arbitration. Cognizant of the frailties of memory and differences of opinion as to what information should be disclosed, the Richco Structures court applied a reasonable person test to determine evident partiality if the arbitrator failed to make disclosure. The court said that the statutory phrase "evident partiality ... on the part of the arbitrators” requires that an award must be vacated if a reasonable person knowing the previously undisclosed information would have had "such doubts” regarding the arbitrator’s impartiality that she would have taken action on the information to ensure the arbitrator’s impartiality. In other words, a reasonable person would conclude it "evident,” that is, clear, *276plain, and apparent from the undisclosed information, that partiality is so likely that action was required.
In Richco Structures this court interpreted sec. 788.10(l)(b) to achieve the legislative objective of striking "the proper balance between ensuring finality of arbitration awards and ensuring justice and fairness (and the appearance of justice and fairness).” 82 Wis. 2d at 560. The majority’s willingness in this case to vacate an arbitrator’s award given any evidence of any undisclosed past employment with an entity that supplies counsel to a party upsets the balance struck by the legislature, significantly undermining finality without appreciably increasing the appearance or reality of justice and fairness. The standard adopted by the majority in this case weakens the arbitration process endorsed by the legislature, making awards much easier to topple on appeal and making the arbitration process more protracted and more expensive.
The majority’s adoption of a per se rule not only has no basis in sec. 788.10(l)(b) but also contravenes basic jurisprudential principles. The court ordinarily applies a harmless error test in civil and criminal cases. The Richco Structures test is a type of harmless error test.
The court rarely applies a per se rule to overturn a decision maker; a reversal for an infraction that does 'not affect the reliability of the result or basic principles of justice is too harsh a penalty and too wasteful of resources. Thus in State v. Walberg, 109 Wis. 2d 96, 325 N.W.2d 687 (1982), even where the court concluded that the circuit judge had the appearance of partiality and that his presiding in the case was constitutional error and improper judicial conduct, the court did not reverse the conviction. The *277court affirmed the conviction because the court concluded that the judge’s partiality did not affect the result in the case.
I conclude that the Richco Structures test, not a per se test, comports with the language and purpose of sec. 788.10(l)(b) and the jurisprudential principle of harmless error.
Using the Richco Structures interpretation of sec. 788.10(l)(b), the court ought to affirm the award. While a law student, the arbitrator worked as a part-time law clerk with the entity supplying counsel to one of the parties on matters unrelated to any issues or parties involved in this case. The arbitrator’s undisclosed employment history was remote in time, casual, superficial, isolated and inconsequential in terms of the present arbitration dispute. The arbitrator has no financial interest in the dispute, the parties or their counsel and has no current or recent relationship with the parties or their counsel. The arbitrator is not a one-time or part-time arbitrator. He has been employed for several years as a full-time professional arbitrator with the Wisconsin Employment Relations Commission. Arbitration is his career. He is trained in the necessity of impartiality.
The arbitrator’s past employment record in this case does not rise to the level of signifying partiality or the appearance of partiality. A reasonable person would not have had such doubts about the arbitrator’s impartiality that she would have taken action on the information. The parties have not cited any case, and I can find none, in which any award has been vacated when the arbitrator had the kind of insignificant relation with an entity representing a party as the arbitrator did in this case. See Domke, Commercial Arbitration secs. 21.02, 21.03 (rev. ed.). Furthermore, *278the School Board does not claim and did not prove that the arbitrator was partial or that his undisclosed relationship affected the award.
HH HH
In this case, I conclude that any disclosure required by Richco Structures must be made to the Wisconsin Employment Relations Commission, the parties’ designate, not to the parties themselves. In this case the collective bargaining agreement provided that the Wisconsin Employment Relations Commission (WERC) shall furnish an impartial arbitrator. Section 111.70(4)(c)2, (cm)4, Stats. 1985-86. Under the terms of the collective bargaining agreement neither party has the right to affect WERC’s selection.
Even under the majority’s new standard requiring disclosure of past employment with a party or an entity supplying counsel to a party, this court should not vacate the award because the arbitrator in this case had already disclosed his past employment history to WERC. The circuit court found that WERC was aware of the arbitrator’s clerking experience both at the time WERC hired him and when it appointed him as arbitrator.
WERC’s brief states that WERC acknowledges its duty to consider prior employment and social and business relationships and to advise the parties about the arbitrator’s background if there is any reasonable doubt concerning the arbitrator’s impartiality. Apparently satisfied that the arbitrator’s part-time law clerk experience did not render him partial and did not give rise to any reasonable doubt concerning impartiality, WERC appointed him arbitrator and did not disclose the arbitrator’s past employment record. *279Full disclosure would have been preferable but in vacating an award this court is reviewing WERC’s decision not to disclose the arbitrator’s past employment. This court ought to determine whether WERC abused its discretion, that is, whether it did not reasonably exercise its statutory duty to appoint an impartial arbitrator. If WERC acted reasonably in appointing the arbitrator, the award should not be vacated unless the party seeking to upset the award proves that the arbitrator was partial. In deciding the issue of reasonableness, this court should give some deference to the agency’s expertise in labor and arbitration matters and thus in determining what in the arbitrator’s history should be disclosed to the parties.
I conclude that WERC acted reasonably. As I have explained, any interest or bias based on the arbitrator’s past employment record is remote, uncertain and speculative. The parties got what they bargained for— the appointment of an arbitrator who WERC reasonably believed was impartial and who the parties have not proved was partial.
HH J-H I — I
One might quarrel with the arbitrator’s concept of mercy in this case, as the trial court did when it expressed outrage at the idea that a teacher’s criminal behavior was not just cause for that teacher’s dismissal. But the court’s task is not to judge the merits of an arbitrator’s award.
I see no reason to change our interpretation of the statutory standard of evident partiality in this case, and the court has supplied none. The interpretation of sec. 788.10(l)(b) which the majority now adopts makes *280it easier for parties to attack arbitration awards in future cases. This result is contrary to the objective of the arbitration statutes. For this reason, I think the statutory interpretation set forth in this case is ultimately an unstable one from which the court will retreat.
For the reasons set forth, I dissent.