Grievance Arbitration Award Affirmed

Posted on October 22, 2009 by Donald Barbati

 

On October 21, 2009, the Appellate Division decided Township of Irvington v. Irvington P.B.A. Local 29, Docket No.: A-0152-08T1. In the case, the Township of Irvington appealed from Law Division orders of April 13, 2007 and July 25, 2008 that respectively confirmed an arbitration award and supplemental arbitration award rendered in arbitration proceedings resulting from grievances filed by Irvington PBA Local 29 and Irvington Superior Officers Association (hereinafter “unions”).

In December 2003, Township officials notified all salaried Township employees that in the upcoming year, instead of their annual salaries being divided by twenty-six, they would be divided by twenty-seven and be paid in twenty-seven biweekly pay periods. Of course, each paycheck would be smaller than if the twenty-six pay period schedule was followed. After some objections and discussions, the Township changed its position. Employees would be paid in twenty-six pay periods, and their annual salaries would be divided by twenty-six, but some of the mid-year pay dates would be adjusted so the pay periods were longer than fourteen days.

On July 30, 2004, the unions filed a grievance claiming that the Township’s adjustment to the four pay dates violated the terms of their collective bargaining agreements. The unions requested that the Township refrain from adjusting the payroll dates, or else pay all union members the eighty “unpaid” hours at the overtime rate of time and one half. After going through all of the required procedural steps for a grievance, the matter was presented to Arbitrator Gerard Restaino.

In his initial award, Arbitrator Restaino required the Township to pay the employees represented by the unions for an additional two-week pay period in 2004. The trial court affirmed the award, but remanded the matter to Arbitrator Restaino for further consideration of the remedy, namely the manner in which the Township would be required to pay the award, in light of the Township’s claim that payment of the total amount required would cause it a severe adverse financial impact. In a supplemental award, the arbitrator modified the remedy to lessen the fiscal impact on the Township. This appeal ensued.

In its brief, the Township argued: (1) the initial award should not have been confirmed because the arbitrator exceeded his authority by disregarding the clear terms of the parties’ collective bargaining agreements; and (2) the supplemental award should not have been confirmed because the arbitrator did not adequately consider the fiscal impact on the Township, and because the court incorrectly ruled as a matter of law that it lacked authority to determine the public policy impact of the award. The unions disputed the arguments raised by the Township, and further argued that the supplemental award was properly confirmed because the Township’s motion to vacate it was untimely.

At oral argument, the Township withdrew argument (1) described above, and advised the Court that it was limiting its argument to the fiscal impact issue. The Appellate Division, after considering the same, affirmed the determination of the trial court. After a thorough review of the record, the Court was satisfied that the trial court did not err in finding that the arbitrator sufficiently considered and addressed the fiscal impact issue in rendering his supplemental award. As a result, the Court found the award was properly confirmed.

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Unions' Grievances Regarding Employer's Change in Benefit Plans Subject to Arbitration

Posted on July 9, 2009 by Donald Barbati

 

On July 2, 2009, the United States Court of Appeals for the Third Circuit decided United Steel v. E.I. Dupont de Nemours and Company, No. 08-1911. In two consolidated cases, Plaintiffs are unions who were seeking to compel Defendants, employers of the unions’ members, to arbitrate Plaintiffs’ grievances about unilateral changes the Defendants made to employee benefit plans. In both cases, the lower court granted summary judgment in favor of the unions on the grounds that: (1) a collective bargaining agreement (“CBA”) between the parties provided for arbitration; and (2) there is no strong and forceful evidence that the parties intended to exclude these disputes from arbitration. 

In appealing the lower courts’ determinations, Defendants contended that the Plaintiff’s grievances are disputes over benefit eligibility and, thus, should be resolved using the dispute resolution provisions of the Summary Plan Description rather than the CBA. Moreover, Defendants argued that ERISA, which governs the employee benefit plans maintained by Defendants, mandates that benefit eligibility disputes of this nature should be resolved by the designated ERISA fiduciary.

In affirming the determination of the lower courts, the Third Circuit noted that the arbitration clauses in the CBAs at issue were broadly worded. Specifically, the New Jersey CBAs provide for arbitration of grievances “relating to the interpretation or to any alleged violation” of those CBAs, while the Delaware CBA provides for arbitration of “[a]ny question as to the interpretation, or any alleged violation, of any provision of” that CBA. There was no express provision in any of the CBAs that excluded Plaintiffs’ grievances. Therefore, a presumption of arbitrability applied and Defendants could only overcome this presumption by showing forceful evidence of a purpose to exclude these claims from arbitration.

The Court determined that there was no forceful evidence that the parties did not intend to submit these disputes to arbitration. In rejecting Defendants’ argument which characterized the grievances as disputes about “benefit eligibility”, the Court found the disputed issue is not whether any particular employee was eligible under the terms of the plan, but rather whether Defendants violated the CBAs by unilaterally modifying its terms. Moreover, the Court noted that were it to accept Defendants’ characterization of the grievances, this would eliminate any opportunity for a meaningful challenge to Defendants’ unilateral plan amendments and thereby thwarting the CBAs’ arbitration clauses. As such, the Court affirmed the determination of the lower courts.

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