Summary
observing that "[t]he whole purpose of arbitration would be undermined if courts had broad authority to vacate an arbitrator's award"
Summary of this case from Dodge v. DodgeOpinion
No. 85-855
Decided February 5, 1986.
Arbitration — Labor relations — Essence of arbitrator's award lies in rational nexus between collective bargaining agreement and award — Enforceability of collective bargaining agreements.
O.Jur 3d Employment Relations §§ 442, 537.
1. An arbitrator's award draws its essence from a collective bargaining agreement when there is a rational nexus between the agreement and the award, and where the award is not arbitrary, capricious or unlawful.
2. Negotiated collective bargaining agreements are just as binding upon public employers as they are upon private employers.
APPEAL from the Court of Appeals for Mahoning County.
Appellee, Mahoning County Board of Mental Retardation and Developmental Disabilities ("board"), is a public, tax-supported agency created under the authority of R.C. Chapter 5126. Appellant, Mahoning County Trainable Mentally Retarded Association ("association") is a local affiliate of the Ohio Education Association and represents professional staff members employed by the board. The association and the board have been parties to a series of collective bargaining agreements. The 1979-1981 agreement is the subject of this lawsuit.
Article III of the collective bargaining agreement contained a grievance procedure to resolve disputes arising under the contract. Section 3.06(c) of Article III provided:
"If the employee requests the Association to process * * * [a] grievance to arbitration, the Association may submit the grievance to arbitration by giving written notice to the Superintendent of its intent to do so. The parties shall first attempt to agree upon an impartial arbitrator to hear the grievance. If the parties are unable to agree within five (5) days from the Superintendent's receipt of the Association's appeal to arbitration, the Association shall then request the American Arbitration Association to administer the proceedings under the Voluntary Labor Arbitration Rules of that Association. * * *"
Section 3.061 of Article III provided:
" The decision of the arbitrator shall be final and binding upon the parties. The authority of the arbitrator shall be to determine controversies involving the interpretation, application, or alleged violation of specific provisions of this Agreement and he shall have no power to add to, subtract from, or modify any of the terms of this Agreement, or to arbitrate any matter not specifically provided for by this Agreement." (Emphasis added.)
The board operates the Leonard Kirtz Mahoning County School for the Retarded. Students attending the school are assigned to classes based on their age and functional abilities. Students with low-functioning abilities are assigned to Developmental Classrooms I and II.
In 1978, the board hired Mary Bagnoli and assigned her to teach students with low-functioning abilities in Developmental Classroom I. She taught there during the 1978-1979, 1979-1980 and 1980-1981 school years. Her supervisor, Principal Alice Rossi, rated her performance as excellent. In February 1981, Bagnoli told Rossi that she wanted to be transferred so that she could teach students with greater abilities. In June 1981, she expressed a similar desire to the school system superintendent. The superintendent told Bagnoli to talk with Rossi about a transfer. Shortly thereafter, Bagnoli spoke with Rossi. Bagnoli told her that three teachers, who were instructing higher functioning students, would not be returning for the 1981-1982 school year. Bagnoli asked to be transferred to one of their classrooms. At about the same time, the board was informed that the three teachers would not be returning for the 1981-1982 school year.
On August 21, 1981, Rossi informed Bagnoli that her request for transfer had been denied. On August 27, 1981, Bagnoli wrote to the school superintendent and again requested a transfer. The request was denied and the board filled the vacancies by transferring two teachers, neither of whom had requested reassignment, and by hiring a new teacher.
On September 8, 1981, the association filed a grievance on Bagnoli's behalf claiming that the denial of her transfer request violated Section 5.09, Article V of the 1979-1981 collective bargaining agreement. The parties, being unable to resolve the grievance between themselves, submitted the matter to final and binding arbitration pursuant to step 5 of the agreed-to grievance procedure. On July 24, 1982, the arbitrator found that the board had violated Sections 5.09(d) and 5.10, Article V of the agreement. Section 5.09 provided:
" Vacancies
"a. A vacancy shall be defined as a position previously held by any member of the Employee Unit or a position, existing or newly created, for which a member of the Employee Unit is qualified.
"b. When the Superintendent learns of a vacancy, he or his designate shall, as soon as reasonably possible, post notice of such vacancy in a conspicuous place in all Program buildings. During the summer recess such notice shall be mailed to those employees not working.
"c. Each notice of vacancy shall include the building, the functioning level, and the qualifications required of each applicant. In the case of newly created positions or positions outside of the Employee Unit, said notice shall also stipulate the compensation for the position.
"d. Employees shall have one week to bid on a vacancy. When the qualifications of two or more employees are deemed equal, preference will be given to the one with the greatest seniority."
Section 5.10 provided:
" Transfers
"a. The Board and the Association recognize that frequent transfers of personnel from one building to another or from one assignment to another within the same building is [ sic] disruptive of the educational process and shall be avoided whenever possible.
"b. When, in the judgment of the Board, it becomes necessary to make such a transfer or change of assignment, the Board will not do so without prior discussion with the employee to be transferred.
"c. Such transfers and changes of assignment shall be on a voluntary basis whenever possible.
"d. In making involuntary transfers and changes of assignment, the wishes of the employee will be honored to the extent that these considerations do not conflict with the instructional requirements and best interests of the students and clients.
"e. In all transfer situations, when other considerations are deemed equal, preference will be given to the employee with the greatest seniority."
The arbitrator ordered the board to remedy its breach by granting Bagnoli's transfer request.
On October 12, 1982, the board filed a motion in the Court of Common Pleas of Mahoning County requesting "* * * that the court vacate the Award of the Arbitrator for the reason that the Arbitrator exceeded his powers by adding to, subtracting from and modifying the terms of the Master Agreement between the parties. * * * [T]he Arbitrator's decision herein abrogated and usurped the power of the * * * [board] or its designate, to assign or transfer teachers as conferred upon the Board by the * * * [collective bargaining agreement, and] the laws and Constitution of the State of Ohio * * *." On June 16, 1983, the court vacated the arbitrator's award pursuant to R.C. 2711.10. The applicable provision, R.C. 2711.10, provides in part:
"In any of the following cases, the court of common pleas shall make an order vacating the award upon the application of any party to the arbitration if:
"* * *
"(D) The arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made."
In vacating the arbitrator's decision, the court noted that R.C. 5126.06 makes all personnel decisions the sole function of management. The court further noted that the only way Sections 5.09 and 5.10 of the collective bargaining agreement "* * * can be interpreted so as to be consistent with the statutory requirements of R.C. 5126.06 is to treat these provisions as merely a procedural method whereby those members of the faculty who desire to make a job change can make their wishes known to the Superintendent and the Board."
R.C. 5126.06 provides in part:
"The superintendent of the county board of mental retardation and developmental disabilities shall:
"* * *
"(C) Approve all employment contracts and personnel actions that involve employees in the classified civil service and, subject to the approval of the board, approve all other employment contracts and personnel actions as may be necessary for the work of the board;
"(D) Approve compensation for employees within the limits set by the salary schedule and budget set by the board and ensure that all employees and consultants are properly reimbursed for actual and necessary expenses incurred in the performance of official duties; * * *."
On appeal, the court of appeals affirmed the decision. The court of appeals first recognized that arbitrators have broad authority to interpret the terms of private-sector collective bargaining agreements. The court went on to indicate that arbitrators in public sector labor disputes have much narrower authority, and stated that the arbitrator in the case at bar had exceeded that authority by ordering the board to grant Bagnoli's transfer request.
The cause is now before this court pursuant to the allowance of a motion to certify the record.
Henderson, Covington, Stein, Donchess Messenger, James L. Messenger and Christopher J. Newman, for appellee.
Green, Schiavoni, Murphy, Haines Sgambati Co., L.P.A., Dennis Haines and Barry Laine, for appellant.
Means, Bichimer, Burkholder Baker Co., L.P.A., Robert T. Baker and Kimball H. Carey, urging affirmance for amicus curiae, Ohio School Boards Association.
The issue in this case is whether the arbitrator exceeded his authority by ordering the board to grant Bagnoli's transfer request.
Arbitration occurs when disputing parties contractually agree to resolve their conflict by submitting it to a neutral third party for resolution. It provides the parties with a relatively speedy and inexpensive method of conflict resolution and has the additional advantage of unburdening crowded court dockets. The whole purpose of arbitration would be undermined if courts had broad authority to vacate an arbitrator's award. Thus, this court has stated, "[i]t is the policy of the law to favor and encourage arbitration and every reasonable intendment will be indulged to give effect to such proceedings and to favor the regularity and integrity of the arbitrator's acts." Campbell v. Automatic Die Products Co. (1954), 162 Ohio St. 321, 329 [55 O.O. 195]. Indeed, this court has held that "[a] mere ambiguity in the opinion accompanying an arbitration award, which permits the inference that the arbitrator may have exceeded his authority, is not a reason for vacating the award when such award draws its essence from a collective bargaining agreement." Goodyear v. Local Union No. 200 (1975), 42 Ohio St.2d 516 [71 O.O.2d 509], paragraph one of the syllabus. An arbitrator's award draws its essence from a collective bargaining agreement when there is a rational nexus between the agreement and the award, and where the award is not arbitrary, capricious or unlawful.
In the case at bar, the arbitrator simply put the parties in the position they would have been in had the board not breached Sections 5.09(d) and 5.10 of the collective bargaining agreement. Thus, the award rationally flows from the terms of the agreement, and it is neither arbitrary nor capricious. To deny credence and efficacy to these sections of the agreement would be, in effect, writing them out of the collectively bargained contract of the parties. A contrary holding would mean that in almost every case, the party that was disappointed by the arbitrator's award would be able to obtain sweeping judicial review by pointing to the familiar boilerplate language of barring the arbitrator from "adding to or subtracting from the agreement." As this court stated in Goodyear v. Local Union No. 200, supra, at 520, "* * * [t]his would defeat the bargain made by the parties and would defeat as well the strong public policy favoring private settlement of grievance disputes arising from collective bargaining agreements."
The board argues, and the court of appeals decided, that collective bargaining agreements are not as binding upon public employers as they are upon private employers. It is time to put an end to that notion and categorically reject the argument. Today's decision gives notice that negotiated collective bargaining agreements are just as binding upon public employers as they are upon private employers. Warren Edn. Assn. v. Warren City Bd. of Edn. (1985), 18 Ohio St.3d 170, 175. Courts should not allow public employers to disregard the terms of their collective bargaining agreements whenever they find it convenient to do so. On the contrary, the courts will require public employers to honor their contractual obligations to their employees just as the courts require employees to honor their contractual obligations to their employers.
For all the foregoing reasons, the judgment of the court of appeals is reversed and the arbitrator's award is reinstated.
Judgment reversed.
CELEBREZZE, C.J., SWEENEY, LOCHER and C. BROWN, JJ., concur.
WRIGHT, J., concurs in the syllabus and judgment only.
HOLMES, J., concurs in judgment only.