United Federation of Teachers, Local 2 v. Board of Education of the City School District of the City of New York, 1 N.Y.3d 72 (2003)

A public sector arbitration award can only be vacated if it violates a strong public policy, is irrational, or exceeds a specifically enumerated limitation on the arbitrator’s power; judicial restraint is particularly appropriate in arbitrations pursuant to public employment collective bargaining agreements.

Summary

This case concerns whether an arbitrator exceeded her authority by ordering a board of education to place a teacher in an after-school reading program, finding the board’s selection process arbitrary. The New York Court of Appeals held that the arbitration award did not violate public policy nor did the arbitrator exceed her authority under the collective bargaining agreement (CBA). The Court emphasized the narrow scope of the public policy exception to an arbitrator’s power, particularly in public employment disputes, and held that the board, by participating in arbitration, forfeited its right to challenge the arbitrator’s authority to hear the dispute.

Facts

Linda Feil, a teacher with 26 years of experience, applied for a position in the “Project Read After-School Program.” While she lacked preferred licenses, she held a common branch license and had prior experience in similar programs. The principal filled six openings, selecting two teachers with preferred licenses and less seniority than Feil. Feil was not selected, leading her union, the United Federation of Teachers (UFT), to file a grievance, arguing that Feil was more qualified and senior than some selected applicants. The principal cited his judgment of the selected teachers’ specific experience. The grievance was denied at multiple steps before proceeding to arbitration.

Procedural History

The UFT pursued arbitration after the grievance was denied at earlier stages. The arbitrator ruled in favor of the UFT, directing the Board to place Feil in the program and award back pay. The Board complied with the placement but resisted the back pay, moving to vacate the award. The Supreme Court confirmed the award, but the Appellate Division reversed, holding that the award violated public policy and exceeded the arbitrator’s power. The Court of Appeals then reversed the Appellate Division, reinstating the Supreme Court’s order.

Issue(s)

Whether an arbitrator’s award, directing a board of education to place a teacher in an after-school program and award back pay after finding the selection process arbitrary, violates public policy or exceeds the arbitrator’s authority under a collective bargaining agreement.

Holding

No, because the arbitration award did not violate a strong public policy, and the arbitrator did not exceed her authority under the CBA. By submitting to arbitration, the Board forfeited its right to challenge the arbitrator’s authority, and the award addressed a selection from qualified candidates, not the hiring of an unqualified candidate.

Court’s Reasoning

The Court of Appeals emphasized the narrow scope of the public policy exception to an arbitrator’s power, particularly in public employment collective bargaining agreements. Citing Matter of New York City Tr. Auth. v Transport Workers Union of Am., Local 100, AFL-CIO, 99 NY2d 1 (2002), the court reiterated that judicial intervention on public policy grounds is a narrow exception. The court applied a two-prong test: First, whether a law absolutely prohibits arbitration of the issue; and second, whether the award violates a well-defined constitutional, statutory, or common law. The Court found that the Board failed to demonstrate a well-defined law or policy that prohibited the arbitrator’s decision to review the selection process from among qualified candidates. The Court distinguished cases cited by the Board, noting those cases involved non-delegable duties such as tenure decisions or terminating probationary appointments.

Regarding the arbitrator’s authority, the Court stated: “It is not for the courts to interpret the substantive conditions of the contract or to determine the merits of the dispute.” The court emphasized that even if the arbitrator made errors of law or fact, courts should not intervene. The Court found that the arbitrator acted within her authority under the CBA by determining that the Board’s decision-making process was arbitrary and capricious, and fashioning a remedy. The Appellate Division erred by substituting its judgment for the arbitrator’s.