Argument Report: Debating an Arbitrator's Power to Interpret a Collective Bargaining Agreement

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Our reports on the November term oral arguments at the Illinois Supreme Court begin with Griggsville Perry Community Unit School District No. 4 v. Illinois Educational Labor Relations Board. Our preview of Griggsville is here.

Griggsville-Perry arose from the firing of a noncertified paraprofessional who worked in an elementary school library. After a number of complaints about her performance, the superintendant of the school district notified the employee that she would be fired at an upcoming meeting. The employee and her union representative appeared before the board and the employee testified, but the board fired her. The union filed a grievance, and the arbitrator ordered the employee reinstated, finding that she was entitled to a statement of the specific acts and omissions that the board alleged justified her discharge. The Appellate Court reversed, noting that the collective bargaining agreement said nothing about limiting discharge to just, good or proper cause. The Court found that the arbitrator's decision was without support in either past practice of the parties or the interpretation of similar contract language in other cases.

Judging from the active questioning of both sides, the Justices of Supreme Court seem conflicted about Griggsville. Counsel for the Educational Labor Relations Board began by emphasizing the deferential standard of review - the Board reviews the decision of the arbitrator, and the Court then reviews the Board's decision for clear error. Justice Burke asked counsel whether the parties' agreement to arbitrate necessarily implies dismissal only for just cause. Counsel responded that the agreement implies a lesser standard of arbitrary and capricious. Justice Theis asked counsel how the court should define just cause, arbitrary and capricious, and exactly what the difference was. Counsel responded that "just cause" requires a "fit" between the alleged act and the penalty of dismissal. An "arbitrary and capricious" standard, on the other hand, required mere reasoned support for the penalty, rather than a close fit. Justice Theis followed up, asking whether there was a standard in between the two. Counsel responded that the intermediate standard was progressive discipline.

Counsel for the Board argued that the Board's decision could not be reversed based on a finding that the arbitrator had misinterpreted the collective bargaining agreement; if the decision was derived from the essence of the contract, the decision had to be affirmed. Justice Garman asked whether the "essence of the contract" included elements merely implied in the contract, and counsel responded that there was a "common law of the shop" which the parties knew would be used to fill in gaps in the contract. Justice Theis asked counsel to point out where the arbitrary and capricious standard was to be found in the agreement. Counsel argued that the standard was inherent in the contractual grievance procedure. Justice Theis pressed counsel, challenging the basis for his claim; counsel responded that industrial common law supported his view, but pointed out that whether or not the arbitrator correctly interpreted industrial common law was not a matter subject to judicial review. Justice Garman asked counsel whether it made a difference that the Board and the Union could not reach an agreement on a just cause standard. Counsel responded that the arbitrator could not apply at will or "just cause," because the parties couldn't reach agreement on either standard. Therefore, the applicable standard must be arbitrary and capricious. Justice Theis commented that the arbitrator had looked at both at will and just cause, and settled somewhere in the middle -- but it wasn't entirely clear what "the middle" standard meant. Counsel argued that arbitrary and capricious was not an intermediate standard, but was in fact a low bar.

Counsel for the school board attempted to refocus the discussion, arguing that the case was not about contract interpretation. Justice Thomas suggested that there was "nothing earth-shattering" about the arbitrator's award, but counsel disagreed. The arbitrator's award was contrary to what the parties had negotiated, counsel insisted; requiring a reasoned evidentiary hearing whenever employees are given a mere opportunity to be heard would represent a significant change in the law, particularly since it wasn't clear what the arbitrator's view of just cause would be in any particular case. Counsel reviewed the parties' contract negotiations in detail: first, the union had proposed progressive discipline. The board had responded with a proposal for "manifest weight of the evidence," with a right to notice and hearing. Ultimately, the parties had agreed to waive their competing proposals: leaving matters at "employment at will." Counsel argued that the union had squarely rejected an "arbitrary and capricious" standard, barring the arbitrator from imposing one. Justice Thomas asked counsel what was wrong with the Board's view that the arbitrator had merely found that the contract contained an implicit requirement that notice and hearing be meaningful. Counsel responded that the arbitrator's decision was merely just cause by another name, giving the union what it had rejected in negotiations. Justice Burke noted that a line of Federal cases holds that an agreement to arbitrate employment disputes necessarily implies just case, and asked counsel what an arbitrator was to do if employment was at will and there was no standard of review. Counsel responded that the arbitrator should confirm that an employee had received notice and union representation, and no more. Justice Theis asked whether the arbitrator's decision didn't amount to saying that there must be some kind of standard for an employee's meeting not to be meaningless? Counsel responded that the problem was that the arbitrator had failed to take into account the fact that the standard at issue had been rejected at the collective bargaining table. Justice Karmeier pointed out that the relevant provision of the collective bargaining agreement actually referred to a right to a "meeting," not a "hearing," and asked counsel whether the distinction made a difference. Counsel agreed that the agreement did not use the word "hearing" to describe the employee's rights.

In rebuttal, counsel argued that the case was not ultimately about the employee's rights under section 2.6 of the collective bargaining. Rather, according to counsel, the dispute revolved around the employee's right under section 2.1 to review materials in his or her personnel file and attach dissenting or explanatory material. According to counsel, the arbitrator had reversed the board's decision because the employee was terminated based on notes about her job performance which the employee had not seen, which the board reviewed in executive session. Justice Theis asked whether counsel's argument was ultimately procedural rather than substantive, and counsel answered that the arbitrator had never in fact reached the issue of whether just cause had been proven.

The Court should file its opinion in Griggsville within three to six months.

 

Published In: Antitrust & Trade Regulation Updates, Civil Procedure Updates, Education Updates, Labor & Employment Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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