Kowaleski v. New York State Dept. of Correctional Servs., 16 N.Y.3d 89 (2010)

An arbitration award must be vacated if the arbitrator fails to consider and determine the merits of an employee’s retaliation defense under Civil Service Law § 75-b, even if the collective bargaining agreement limits the arbitrator’s authority.

Summary

Barbara Kowaleski, a correction officer, was disciplined for alleged misconduct. She claimed the discipline was retaliatory for reporting a fellow officer’s misconduct and raised a defense under Civil Service Law § 75-b. The arbitrator found he lacked authority to consider the retaliation defense, found Kowaleski guilty of some charges, and upheld her termination. The New York Court of Appeals reversed, holding that the arbitrator exceeded his power by failing to consider the retaliation defense, which Civil Service Law § 75-b mandates must be considered, thus requiring the arbitration award to be vacated.

Facts

Barbara Kowaleski, a correction officer at Hale Creek Correctional Facility, was served with a notice of discipline for making inappropriate comments, arguing with a fellow employee, and being disrespectful to a supervisor in September and October 2004. Kowaleski claimed the disciplinary action was in retaliation for reporting a fellow officer’s misconduct in 2002, where she witnessed excessive force. Following her report, she was harassed by coworkers. The arbitrator determined he lacked the authority to consider the retaliation defense but would consider the evidence when determining witness credibility.

Procedural History

Kowaleski filed a grievance, and an arbitration hearing was held. The arbitrator upheld two of the three charges and determined termination was appropriate. Kowaleski filed a CPLR 7511 petition seeking to vacate the arbitrator’s opinion. Supreme Court found the arbitrator exceeded his power but declined to vacate the award, finding a separate basis for the disciplinary action. The Appellate Division affirmed. The Court of Appeals reversed, holding that the arbitrator’s failure to consider the retaliation defense required vacating the award.

Issue(s)

Whether an arbitration award must be vacated when the arbitrator fails to consider and determine the merits of an employee’s retaliation defense under Civil Service Law § 75-b, based on the arbitrator’s belief that the collective bargaining agreement limited such authority.

Holding

Yes, because Civil Service Law § 75-b mandates that the merits of such defense shall be considered and determined as part of the arbitration award.

Court’s Reasoning

The Court of Appeals reasoned that under CPLR 7511 (b), an arbitration award must be vacated if a party’s rights were impaired by an arbitrator who exceeded his power. An arbitrator exceeds his power when the award violates a strong public policy or exceeds a specifically enumerated limitation on the arbitrator’s power. Civil Service Law § 75-b prohibits public employers from retaliating against employees for reporting “improper governmental action.” The statute mandates that the arbitrator consider and determine the merits of a retaliation defense. The Court emphasized that the arbitrator’s failure to separately consider and determine Kowaleski’s affirmative defense of retaliation on the merits requires the award to be vacated.

The Court noted that a disciplinary action may be retaliatory even if the employee is guilty of the alleged infraction. Civil Service Law § 75-b (3) requires an arbitrator to dismiss a disciplinary action based solely on retaliatory motive, regardless of the employee’s guilt or innocence. The Court quoted the Governor’s Approval Memorandum, stating the law establishes “a major right for employees—the right to speak out against dangerous or harmful employer practices.”

The court emphasized that “[t]he merits of such defense shall be considered and determined as part of the arbitration award or hearing officer decision.”