Matter of Liverpool Cent. School Dist. v. United Liverpool Faculty Ass’n, 42 N.Y.2d 509 (1977)

In arbitrations under the Taylor Law, courts determine the scope of the arbitration clause and whether the issue is arbitrable, guided by the principle that the agreement to arbitrate must be express, direct, and unequivocal.

Summary

This case concerns whether a school district was required to arbitrate a dispute with a teacher under a collective bargaining agreement. The teacher was placed on leave for refusing to undergo a medical examination by a male doctor, as required by the school district. The union sought arbitration, but the school district sought a stay. The Court of Appeals held that under the Taylor Law, courts must determine if the arbitration clause covers the dispute, and that the agreement to arbitrate must be explicit. Because the dispute could reasonably be classified under both included and excluded categories of the arbitration agreement, the court found the agreement to arbitrate was not unequivocal and arbitration was not required.

Facts

Lorraine Gargiul, a teacher, took sick leave in November 1974 and notified the Liverpool Central School District in February 1975 of her intent to return. The school district required her to undergo a medical examination by the school district physician, Dr. Paul Day, per Section 913 of Education Law. Gargiul refused to be examined by a male physician, insisting on a female doctor. The Board of Education then passed a resolution directing her to be examined by Dr. Day if he deemed it necessary after reviewing her health history. Upon her continued refusal, she was placed on leave of absence without pay.

Procedural History

The United Liverpool Faculty Association initiated grievance procedures on Gargiul’s behalf. After the grievance was not resolved, the Association demanded arbitration. The school district applied for a stay of arbitration, which was granted by Special Term. The Appellate Division reversed that decision. The Court of Appeals then reversed the Appellate Division, reinstating the Special Term’s stay of arbitration.

Issue(s)

1. Whether, under the Taylor Law, courts or arbitrators determine the scope of an arbitration clause in a public sector collective bargaining agreement.
2. Whether the specific dispute regarding the medical examination requirement falls within the scope of the arbitration clause in this case.

Holding

1. Yes, because in arbitrations under the Taylor Law, courts determine the scope of the arbitration clause.
2. No, because the agreement to arbitrate this specific dispute was not express, direct, and unequivocal.

Court’s Reasoning

The court reasoned that arbitration agreements in the public sector under the Taylor Law differ from both commercial arbitration and private sector labor arbitration. While private sector labor relations favor arbitration, and commercial arbitration requires an explicit agreement, public sector arbitration requires a two-tiered analysis. First, it must be determined if the Taylor Law permits arbitration of the subject matter. Second, if permissible, it must be determined if the parties actually agreed to arbitrate the specific dispute. The court stated, “When challenge is raised to the submission to arbitration of a dispute between employer and employee in the public sector the threshold consideration by the courts as to whether there is a valid agreement to arbitrate (CPLR 7503, subd [a]) must proceed in sequence on two levels.”

Because elected representatives in the public sector have nondelegable responsibilities to taxpayers, it cannot be inferred that they intended to adopt the broadest possible arbitration clauses without a clear agreement. Here, the arbitration clause was limited, explicitly including certain disputes and excluding others. The court found that the dispute over the medical examination could reasonably fall into both included (health-related) and excluded (disciplinary proceeding) categories. Since the agreement to arbitrate this specific issue was not “clear and unequivocal,” the school district was not required to submit to arbitration. The Court emphasized that the labels attached by the parties are not determinative. “In this circumstance, we cannot conclude that the present dispute falls clearly and unequivocally within the class of claims agreed to be referred to arbitration.”