Court Opinion

ID: 9719859
Source: CourtListenerOpinion
Date Created: 2023-08-26 08:07:07.828054+00
Date Added: 2024-06-11T12:47:15.841939
License: Public Domain

Smith, J. (dissenting).
As I see it, this case turns on what standard of review applies. When an arbitrator interprets an ordinary term in a contract, a court may overturn his decision only if it is irrational, or contrary to public policy; if this were the standard of review here, I would agree with the majority that the arbitrator’s award should be upheld. But the contract clause now in issue is an express limitation on the arbitrator’s power. In such a case, under our precedents, the arbitrator’s ruling is reviewable for clear error, and I believe he clearly erred.
CPLR 7511 (b) (1) (iii) says that an arbitrator’s award “shall be vacated” if the arbitrator “exceeded his power.” This means, we have often said, that an award that “clearly exceeds a specifically enumerated limitation on the arbitrator’s power” must be set aside (e.g. Matter of Henneberry v ING Capital Advisors, LLC, 10 NY3d 278, 284 [2008], quoting Matter of New York City Tr. Auth. v Transport Workers’ Union of Am., Local 100, AFL-CIO, 6 NY3d 332, 336 [2005]). The clause at issue here is just such a “specifically enumerated limitation.” It is part of the section of the agreement dealing with arbitration, and says that, where a “charge involving assault” has been substantiated, the Authority’s disciplinary action “shall be affirmed and *126sustained by the [arbitrator]” in the absence of “credible evidence that the action by the Authority is clearly excessive in light of the employee’s record and past precedent in similar cases.” Thus, while as a general matter the parties to an arbitration agreement put themselves very largely at the arbitrator’s mercy, the parties here sought not to do that, but to disable the arbitrator from rejecting the penalty imposed by the Authority for an assault, in the absence of the extraordinary circumstances the agreement describes.
The question before us is whether the award the arbitrator rendered “clearly exceeds” the agreement’s limitation on his power. I conclude that it does. The “employee’s record” shows that he had previously been suspended for “a customer altercation.” This was 15 years before the incident now in question, but the Authority could surely find that repeated fights with customers, even once a decade, are unacceptable; most of its employees no doubt avoid such incidents for their whole careers. And no “past precedent in similar cases” imposing a punishment less severe than dismissal was shown to exist. The best the employee could do was to look for distinctions—sometimes rather thin ones—between this case and the many others in which the Authority dismissed employees who assaulted customers. The arbitrator was clearly wrong to find that the Authority’s punishment of this employee was “clearly excessive in light of the employee’s record and past precedent in similar cases.”
Because the arbitrator exceeded a limitation that the parties placed on his power, I would affirm the Appellate Division’s order vacating the award.
Judges Ciparick, Graffeo, Pigott and Jones concur with Chief Judge Lippman; Judge Smith dissents and votes to affirm in a separate opinion in which Judge Read concurs.
Order reversed, etc.