In re the Arbitration Between States Marine Lines, Inc. & Crooks, 13 N.Y.2d 206 (1963)
An arbitration award is considered final and definite, and therefore enforceable, even if it prescribes a wage scale that fluctuates based on an external factor, provided that the factor is fixed or readily determinable through a simple arithmetical calculation.
Summary
States Marine Lines, operator of the nuclear ship N.S. Savannah, challenged an arbitration award that set wages for its deck officers based on a differential from the wages of the ship’s engineers. The arbitrator set the commodore’s wage at a fixed amount or a specified amount more than the chief engineer’s wage, whichever was greater. States Marine argued the award was indefinite and exceeded the arbitrator’s powers because the engineers’ wages were not yet finalized and were determined by a separate union. The New York Court of Appeals upheld the award, finding it sufficiently definite because the wage calculation involved a simple arithmetical process based on readily available information and that the arbitrator did not exceed his powers.
Facts
States Marine Lines operated the N.S. Savannah as a general agent for the United States. The company had collective bargaining agreements with two unions: the International Organization of Masters, Mates and Pilots (MMP), representing deck officers, and the National Marine Engineers Beneficial Association (MEBA), representing engineers. The MMP agreement contained a clause allowing the union to raise the issue of wages for licensed deck officers on new types of power plants, like the Savannah’s nuclear plant, with any disagreements subject to arbitration. Following a work stoppage, wage disputes were submitted to arbitration. The arbitrator determined the wages for the deck officers based on a differential from the engineers’ wages.
Procedural History
States Marine moved to vacate the arbitration award, arguing it was indefinite and exceeded the arbitrator’s authority. Special Term denied the motion to vacate. The Appellate Division affirmed the Special Term’s decision. States Marine appealed to the New York Court of Appeals.
Issue(s)
Whether an arbitration award that sets wages for deck officers based on a differential from the wages of engineers, which are determined through separate negotiations with another union, is considered a final and definite award subject to enforcement.
Holding
Yes, because the wage scale provided for could fluctuate depending on some outside factor as long as that factor is itself fixed or readily determinable and because by delegating to the arbitrator the power to provide a wage structure which they were unable to negotiate, the parties, broadly speaking, vested in the arbitrator the same power to make a wage agreement that they themselves had.
Court’s Reasoning
The Court of Appeals reasoned that the arbitrator did not exceed his powers, noting the arbitration clause was broad enough to empower the arbitrator to decide every aspect of the wage controversy. The court found no attempt to bind MEBA, as the award only dictated what States Marine must pay the deck officers and didn’t control the engineers’ bargaining. The court addressed the argument that the award wasn’t final and definite because the wage scale could fluctuate with changes in MEBA wages. It held that an award doesn’t lack definiteness if it prescribes a wage scale that fluctuates depending on some outside factor, as long as that factor is itself fixed or readily determinable. The court emphasized that the formula was clear and specific, requiring only a simple arithmetical calculation to determine the wages owed. The court stated, “The fact that certain computations will have to be made week by week to carry the award into effect…does not render the award ineffective for the present or for the future. The formulae for the computations are so clear and specific that the determination of the amounts owing to the petitioner week by week is merely an accounting calculation.” The court dismissed concerns that future awards might make execution impossible, stating that such issues could be addressed if they arise, but they don’t deprive the award of finality or validity.