63 N.Y.2d 986 (1984)
An arbitrator’s authority is derived from the collective bargaining agreement, and an award that disregards explicit limitations within the agreement will not be enforced.
Summary
This case concerns the enforceability of an arbitration award that exceeded the limitations explicitly defined in a collective bargaining agreement. The arbitrator disregarded a clause prohibiting retroactive awards beyond the date of the written grievance, deeming it unconscionable. The New York Court of Appeals reversed the Appellate Division’s order, holding that the arbitrator acted outside the scope of his authority by ignoring the contractual limitations. The decision underscores the principle that arbitrators are bound by the terms of the agreement that grants them their power, and courts will not enforce awards that demonstrate infidelity to those terms.
Facts
A collective bargaining agreement between Local 342 and an employer contained an arbitration clause. The clause stipulated, “No award shall be effective retroactively beyond the date on which the grievance was first presented in writing pursuant to the grievance procedure as herein provided, nor for any period subsequent to the termination of the Agreement”. Despite this express limitation, the arbitrator issued a supplemental award that violated the clause, concluding that enforcing the limitation would be unconscionable.
Procedural History
The case originated from a dispute arbitrated under a collective bargaining agreement. The arbitrator’s supplemental award was challenged for exceeding the scope of the arbitration clause. The Appellate Division initially upheld the award. The New York Court of Appeals then reversed the Appellate Division’s order and set aside the supplemental award.
Issue(s)
Whether an arbitrator, operating under a collective bargaining agreement in the private sector, has the authority to issue an award that contravenes an express limitation contained within the arbitration clause of that agreement.
Holding
No, because the arbitrator’s authority is derived solely from the collective bargaining agreement, and the arbitrator cannot ignore express limitations on their powers specified in the agreement.
Court’s Reasoning
The Court of Appeals emphasized that arbitrators are bound by the limitations imposed upon them by the arbitration agreement. Citing Steelworkers v. Enterprise Corp., 363 U.S. 593, 597, the court stated that “When the arbitrator’s words manifest an infidelity to this obligation, courts have no choice but to refuse enforcement of the award.” The court found that the arbitrator exceeded his authority by disregarding the explicit prohibition against retroactive awards. The court reasoned that both federal law and New York State law dictate that an arbitrator cannot ignore an express limitation on his powers, referencing Matter of Silverman [Benmor Coats], 61 NY2d 299. The decision highlights the importance of adhering to the contractual terms that define the scope of arbitration, ensuring that arbitrators do not act beyond the authority granted to them by the parties’ agreement. The court held that it would be an error to allow an arbitrator to rewrite the contract by ignoring its express limitations.