Matter of Committee of Interns and Residents v. New York City, 87 N.Y.2d 419 (1995)
A contractual agreement to arbitrate disputes between a municipality and its employees is enforceable unless a statute, decisional law, or public policy precludes arbitration of the specific subject matter.
Summary
This case concerns whether the City of New York must arbitrate a dispute over its duty to defend a resident physician, Anyakora, in a malpractice suit. Anyakora allegedly refused to treat a woman in labor, leading to disciplinary action, criminal charges, and a civil suit. The union, Committee of Interns and Residents, sought arbitration based on a collective bargaining agreement requiring the City to provide malpractice insurance. The City argued that General Municipal Law § 50-k and public policy prohibit representing or indemnifying an employee facing criminal charges for the same conduct. The Court of Appeals held that arbitration was permissible because no statute or public policy explicitly prohibits arbitrating the City’s obligation to provide insurance coverage under the collective bargaining agreement. The court emphasized that any potential conflict with public policy could be addressed by the arbitrator when fashioning a remedy.
Facts
Peter Anyakora, a resident physician at Harlem Hospital, allegedly refused to admit, examine, or treat a woman brought in by ambulance in active labor.
Despite a direct order from the hospital administrator, Anyakora did not provide treatment, and the patient gave birth in the admitting room attended only by EMS personnel.
Anyakora faced disciplinary charges from the hospital and criminal prosecution under Public Health Law § 2805-b (2) (b).
The patient, Charlesetta Brown, sued Anyakora for medical malpractice, breach of statutory duty, and intentional infliction of emotional distress.
Anyakora requested the City to represent and indemnify him in the civil suit, citing the collective bargaining agreement between his union and the New York City Health and Hospitals Corporation.
The City denied the request, citing General Municipal Law § 50-k, which limits the obligation to defend and indemnify when the employee’s conduct violates disciplinary rules.
Procedural History
The union filed a grievance alleging the City’s refusal violated the malpractice insurance provision of the collective bargaining agreement.
After the grievance was denied, the union filed a notice of arbitration and commenced a CPLR article 75 proceeding to compel arbitration and stay the civil action.
The City moved to dismiss and for a permanent stay of arbitration, arguing public policy and General Municipal Law § 50-k prohibit representation/indemnification when an employee faces criminal charges for the same conduct.
Supreme Court rejected the City’s motions and directed immediate arbitration.
The Appellate Division unanimously affirmed.
Issue(s)
Whether a dispute over a municipality’s duty to defend and indemnify a public employee in a civil action is arbitrable when the employee faces criminal charges for the same underlying conduct, given a collective bargaining agreement requiring such indemnification.
Holding
Yes, because no statute, decisional law, or public policy prohibits arbitration of the dispute over the City’s obligation to provide malpractice insurance coverage to its employee under the terms of the collective bargaining agreement.
Court’s Reasoning
The Court outlined a two-part inquiry to determine arbitrability: (1) whether arbitration is authorized under the Taylor Law for the subject matter; (2) whether the arbitration clause includes the subject area. (Matter of Acting Supt. of Schools [United Liverpool Faculty Assn.] 42 NY2d 509, 513).
The court emphasized that arbitration is permissible unless a statute, decisional law, or public policy prohibits it. The court distinguished between situations where granting any relief would violate public policy and where only the requested remedy would do so. In the latter, courts should not preemptively intervene (Matter of Port Wash. Union Free School Dist. v Port Wash. Teachers Assn., 45 NY2d 411, 417).
The Court rejected the City’s argument that General Municipal Law § 50-k sets the outer limits of its duty to defend, noting that the statute explicitly states it should not impair other rights to defense or indemnification (General Municipal Law § 50-k [7], [9]).
The court noted that the City’s policy arguments were directed at the specific relief sought (representation) and not the underlying arbitrability of the insurance coverage issue. Any policy concerns can be addressed by the arbitrator when fashioning a remedy. The court stated, “[S]hould the arbitrator’s exercise of remedial discretion end in perceived policy conflicts, review by the courts will not have to rest on speculation or assumption” (id., at 419).
Since the collective bargaining agreement provided for malpractice insurance and no statute prohibits such coverage as a condition of employment, and the arbitration clause broadly covered disputes over contract interpretation, the Court concluded that the dispute was arbitrable.