Opinion
No. CV06-4010047S
February 22, 2007
MEMORANDUM OF DECISION
The plaintiff, Waterbury City Employees Association (the "Union"), has made application to vacate an interest arbitration award dated April 11, 2006 (the "Award") imposed by the defendant Waterbury Financial Planning and Assistance Board (the "Board") on the Union and the defendant City of Waterbury (the "City"). The Union requests a finding by this court that the Board, sitting as the arbitrator of the labor relations dispute pursuant to Special Act 01-1 of the Regular Session of 2001 General Assembly (the "Act"), issued the Award in violation of the provisions of § 52-418 of the Connecticut General Statutes and common-law principles and accordingly seeks to have the Award vacated.
Factual Background
The Award was issued pursuant to the Act, which was enacted by the General Assembly during the January 2001 Session in response to the fiscal crisis then facing the City. This action arises out of the labor relations dispute resolution provisions set forth in Section 11(a) of the Act.
Section 1. It is hereby found and declared that a financial emergency exists with regard to the city of Waterbury, that the continued existence of this financial emergency is detrimental to the general welfare of the city and the state, that the city's continued ability to borrow in the public credit markets and the resolution of this financial emergency is a matter of paramount public interest and that to achieve this resolution it is necessary, appropriate and an essential public purpose to provide in this act for the financing of deficits resulting from the city's operations, the imposition of financial management controls and the creation of the Waterbury Financial Planning and Assistance Board to review the financial affairs of the city of Waterbury, all in order to achieve or maintain access to public credit markets, to fund the city's accumulated deficits and to restore financial stability to the city of Waterbury.
(4)(A) Approve or reject all collective bargaining agreements for a new term, other than modifications, amendments or reopeners to an agreement, to be entered into by the city or any of its agencies or administrative units, including the board of education. If the board rejects a proposed collective bargaining agreement, the parties to the agreement will have ten days from the date of the board's rejection to consider the board's concerns. In rejecting an agreement, the board shall indicate the specific provisions of the proposed agreement which caused the rejection, as well as its rationale for the rejection. The board may, at its option, indicate the total cost impact or savings it would find acceptable in a new agreement. After the expiration of such ten-day period, the board shall approve or reject any such agreement. If the parties have been unable to reach an agreement or the board rejects such agreement, the board shall set forth the terms of the agreement, which shall be binding upon the parties. In establishing the terms of the agreement, as well as in making a determination to reject a proposed agreement, the parties shall have an opportunity to make a presentation to the board. The board shall not be limited to consideration and inclusion in the collective bargaining agreement of matters raised or negotiated by the parties;
The Union is the sole bargaining representative for approximately 700 nonuniform or "white collar" classified civil service employees of the City. The Board was created by the Act and consists of four members appointed by the Governor and three ex-officio members.
Sec. 10.[*](a) There is hereby created the Waterbury Financial Planning and Assistance Board which shall be in the Office of Policy and Management for administrative purposes only, which board shall be comprised of the following members: The Secretary of the Office of Policy and Management or the secretary's designee, who shall serve as the chairman of the board and shall preside over all meetings of the board; the State Treasurer or the treasurer's designee; the mayor; four members appointed by the Governor, one of whom shall be a resident of the city of Waterbury, one of whom shall be affiliated with a business located in the city, one of whom shall have an expertise in finance and one of whom shall be the chief executive officer of a bargaining unit representing employees of the city who is jointly recommended by a majority of the chief executive officers of such units provided such recommendation shall be made not later than seven days after the effective date of this act.
The facts are largely undisputed. The City and the Union were parties to a five-year collective bargaining agreement which, after hearing argument from the parties on the issue of its expiration date, the Board determined had expired on June 30, 2005. This determination by the Board, although initially disputed by the Union at a hearing conducted by the Board on October 3, 2005, has not been challenged in this proceeding.
The following is a chronology of the proceedings and hearings conducted by the Board to establish a successor agreement pursuant to the Act.
1. The Board conducted a hearing on October 3, 2005, at which the Board accepted a written Waiver of Arbitration Timelines from the parties and granted the parties additional time to negotiate the terms of a successor agreement.
2. On November 17, 2005, the Board agreed to postpone further scheduled hearings to allow the parties the opportunity to continue negotiations but ordered that the parties attend all-day arbitration hearings to be conducted on February 13, 14, 15, 21 and 22, 2006 and on such additional dates as necessary for the Board to carry out its duties under the Act.
3. On December 21, 2005, at the request of the parties, the Board provided a preliminary list of 109 "issues of concern" to the Board to "guide" the parties' negotiations. The Board required, and received from the parties, an executed waiver and acknowledgment of the Board's right to identify additional issues of concern.
4. The Board conducted hearings on February 14 and 15, 2006.
5. On February 17, 2006, the Board provided the Union and the City with a list of approximately 125 issues in dispute and of concern to the Board.
6. The Board conducted lengthy hearings on February 21 and 22 and March 2, 2006, at which the City and the Union presented their positions on approximately 125 issues of concern which needed to be resolved to establish a successor agreement.
7. On March 3, 2006, the Board issued its Arbitration Statement which outlined the issues in dispute and advised the parties on its cover sheet that the Board reserved its right to "fully exercise its powers under Special Act 01-01 in rendering an award in this matter."
8. On March 10, 2006, the parties each submitted their "last best offers" to the Board.
9. On March 15, 2006, the Union filed its Brief and Final Argument with the Board and on March 16, 2006, the City filed its Post-Hearing Brief. Thereafter, the Board commenced deliberations.
10. On April 11, 2006, the Board issued its 379-page Award addressing 104 issues not independently resolved by the parties.
11. On April 17, 2006, the Union filed its application to vacate the Award with this court.
The Standard of Review
Section 10(b) of the Act provides, in part, that the Board "shall not be subject to the provisions of chapter 54 of the general statutes." Accordingly, the Board is not an "agency" as defined in Connecticut General Statutes § 4-166 and therefore the provisions governing procedures and appeals under the Uniform Administrative Procedures Act are inapplicable to the Board and to this matter.
The burden is on the plaintiff to produce evidence sufficient to invalidate an arbitration award. Milford Employees Association v. Milford, 179 Conn. 678, 683, 427 A.2d 859 (1980)
Voluntary and statutorily mandated arbitration awards involve different levels of judicial review. "The simple and ineradicable fact is that voluntary arbitration and compulsory arbitration are fundamentally different if only because one may, under our system, consent to almost any restriction upon or deprivation of right, but similar restrictions or deprivations, if compelled by government, must accord with procedural and substantive due process." American Universal Ins. Co. v. Del Greco, 205 Conn. 178, 187, 530 A.2d 171 (1987)
"Compulsory arbitration, per se, however, is not automatically invalid so long as fair procedures are provided by the legislature and ultimate judicial review is available." Id., 189. "The scope of judicial review of an arbitration award is necessarily dictated in large measure by the procedural form the arbitration proceedings take . . . There is no requirement that a verbatim record be made . . . no formal requirements of procedure and practice . . . and no findings of fact or conclusions of law are required." Id., 190-91.
As part of its consideration of the Union's application to vacate the Award, the court has thoroughly reviewed the extensive record of the arbitration proceedings conducted by the Board. The record consists of transcripts of eight meetings or hearings conducted on October 3, 2005, November 17, 2005, February 14, 15, 21 and 22, 2006, March 2, 2006 and April 11, 2006 totaling 948 pages, the Last Best Offers of the City and the Union totaling 354 pages, the Organization and Policies of the Board, the 379-page Decision and Award of the Board dated April 11, 2006 and other correspondence, notifications and exhibits of the parties.
The record is voluminous and replete with references to compensation and demographic studies and reports presented to the Board by both parties (some of which were cited by both parties in support of their respective positions) as well as discussion of topics as varied and novel as dress codes, presidential holidays, additional compensation for carrying a pager on time off, attendance policies, grievance procedures and all issues of concern that either party wished to comment or present evidence on.
Grounds for Vacatur
The Union claims that the Award violates Connecticut General Statutes § 52-418 which sets forth the sole statutory grounds for vacatur of an arbitration award. The Union has also petitioned the court to vacate the Award pursuant to "the common law."
Section 52-418 provides in pertinent part that the court "shall make an order vacating the award if it finds any of the following defects: (1) If the award has been procured by corruption, fraud or undue means; (2) if there has been evident partiality or corruption on the part of any arbitrator; (3) if the arbitrators have been guilty of misconduct in refusing to postpone the hearing upon sufficient cause shown or in refusing to hear evidence pertinent and material to the controversy or of any other action by which the rights of any party have been prejudiced; or (4) if the arbitrators have exceeded their powers or so imperfectly executed them that a mutual, final and definite award upon the subject matter submitted was not made."
"Despite the wide berth given to arbitrators and their powers of dispute resolution, courts recognize three grounds for vacating arbitration awards . . . As a routine matter, courts review de novo the question of whether any of those exceptions apply to a given award . . . The first ground for vacating an award is when the arbitrator has ruled on the constitutionality of a statute . . . The second acknowledged ground is when the award violates clear public policy . . . Those grounds for vacatur are denominated as common-law grounds and are deemed to be independent sources of the power of judicial review . . ." (Internal quotation marks omitted.) International Brotherhood Of Police Officers v. New Milford, 81 Conn.App. 726, 729-30, 841 A.2d 706 (2004).
"The third recognized ground for vacating an arbitration award is that the award contravenes one or more of the statutory proscriptions of [General Statutes] § 52-418." (Internal quotation marks omitted.) Id., 730.
In Garrity v. McCaskey, 223 Conn. 1, 6, 612 A.2d 742 (1992), our Supreme Court recognized two narrow common-law bases, as opposed to the statutory bases under General Statutes § 52-418 for vacating an arbitration award: (1) when the arbitrator rules on the constitutionality of a statute; and (2) if the award violates clear public policy. The second ground is the only ground implicated in the present case.
The Applicant's Claims of Law
The Union raises multiple claims in paragraphs 10 through 19 of its application to vacate the Award The Union's claims are collectively summarized on page 4 of its brief as follows:
"In creating the latest collective bargaining agreement between the Union and the City, the [Board] denied the Union due process of law in violation of the state and federal constitution (sic). The [Board] further violated clearly established public policy for compulsory interest arbitration, and procured the arbitration award by undue means, exceeded its statutory powers, and acted with partiality in violation of Conn. Gen. Stat. § 52-418." (Emphasis added.)
Although paragraph 10 of the Union's application also alleges that the Board acted with "evident partiality," the Union did not brief this claim and at oral argument stated it was abandoned along with its claim that the member of the Board nominated by the Union and appointed to the Board was "systematically excluded" from the Board's deliberations. (Transcript, October 26, 2006, pg 53 at lines 24-26.) Although the Union's claim of bias [or partiality] on the part of the Board was briefed, it was also abandoned at oral argument. (Transcript October 26, 2006, pg. 31 at lines 10-13.) Finally, although not expressly claimed in its Application, the Union has asserted in its brief that the Act is "Unconstitutional Because it Creates an Overbroad relegation of Authority to an Administrative Body . . ." Accordingly, the court needs to address the Union's remaining claims that (1) the Union was denied due process, (2) the Board exceeded its statutory powers with the result that the Award violates public policy, (3) the Board procured the Award by undue means, and (4) the legislature's delegation of authority to the Board under the Act was overly broad in violation of the state constitution.
The Union raises issues of due process in paragraphs 14, 18 and 19 of its Application.
In paragraph 14, the Union alleges that "[t]he purported 2006 Award is illegal and in violation of law for it disregards applicable due process requirements . . ." Paragraph 14 is merely a conclusion of law and fails to describe the applicable due process requirements that the Union claims the Board disregarded.
In paragraph 18, the claim is that "[t]he 2006 Award is illegal, in violation of public policy and applicable due process requirements in that it results from determinations on issues made by WFPAB [the Board] without clear notice to, and therefore opportunity for submission of evidence by WCEA [the Union] . . ."
In paragraph 19, the Union alleges that "[t]he 2006 Award is illegal, in violation of public policy and applicable due process in that WFPAB imposed awards on issues without providing notice of concerns to WCEA, making the plaintiff's last best offer and any effort to respond or rebut meaningless."
Paragraphs 18 and 19 both raise abstract due process claims of lack of notice and the opportunity to be heard but nowhere in the application does the Union assert the legal basis for the claims. However, despite the union's failure to invoke any specific federal or state constitutional provision or provide any detailed legal analysis, in the interest of completeness, the court will address the merits of the Union's generalized claims.
I Due Process Claims
The due process clause contained in the fourteenth amendment to the United States Constitution and that found in Article first, section eight of our Connecticut constitution contain the same prohibition, that is, that no person may be deprived of "life, liberty, or property, without due process of law" and both provisions are given the same effect. Barnett v. Board of Education, 232 Conn. 198, 214 n. 12, 654 A.2d 720 (1995). The analysis of the Union's claims is the same under both provisions.
In its brief, the Union emphasizes that "§ 11(a)(4)(A) of the Act explicitly requires that:
In establishing the terms of the agreement, as well as in making a determination to reject a proposed agreement, the parties shall have an opportunity to make a presentation to the board." (Emphasis in Union's brief, 8.)
It is worth noting that the Union neglected to emphasize the word "an" before the word "opportunity" in this subsection of the Act.
The Union appropriately cites Mathews v. Eldridge, 424 U.S. 319, 333 (1976) for the proposition that "[t]he fundamental requirement of due process is the opportunity to be heard at a meaningful time and in a meaningful manner." (Union's brief, 27.) The Union continues, however, in the next sentence, "Here, the WFPAB [the Board] ignored the statutory factors and for a number of issues, did not provide notice and an opportunity to be heard." (Emphasis added.) (Union's brief, 27.)
"[D]ue process is flexible and calls for such procedural protections as the particular situation demands." Morrissey v. Brewer, 408 U.S. 471, 481 (1972). The Union does not deny that it received some notice and had the opportunity to be heard and to present evidence to the Board. As indicated in the above Factual Findings, the Union was present and participated in hearings conducted by the Board from October 2005 through April 2006. The essence of the Union's due process claim apparently is that the Board had an obligation to provide the Union with detailed notice and the opportunity to present testimony on every specific contract issue which ultimately was included in the Award before the Award became final.
As authorized by § 10(b) of the Act, the Board adopted "Organization and Policies of the Waterbury Financial Planning and Assistance Board Relating to Labor Powers" consisting of eleven pages, to govern the resolution of labor disputes between the City and the various employee organizations appearing before it. (Exhibit N.)
Chief among the terms of the Award, of which the Union claims it was denied adequate notice are, the duration of the contract and the provision for general wage increases.
The Union also claims that it received no advance notice of the Board's consideration to include in the Award: (i) limitations on automobile mileage reimbursement, (ii) caps on the accrual of sick days, (iii) limitations on the length of educational leave, and (iv) the cost of health insurance premiums payable by retirees hired after the date of the Award. (Union's brief, 13.)
A. Duration Issue
The court will first address the issue of notice and opportunity to be heard on the issue of the duration of the Award. A review of the record reveals substantial evidence that the issue of duration was frequently raised and discussed during the course of the arbitration proceedings.
Defendant's Exhibit F entitled "Waterbury Financial Planning and Assistance Board's Preliminary Issues of Concern" dated December 21, 2005, which was provided to the parties as a guide to facilitate the arbitration process, lists 109 preliminary issues of concern to the Board covering a wide range of issues. Issue No. 103 deals with Article XIX and lists the Board as the "Moving Party" and the "Topic" of concern as "Duration." The concern stated by the Board is that the "Board seeks revision of this provision in accordance with other City contracts and seeks revision to the effective and end dates of agreement; eliminate automatic renewal provision." It should be noted that the "Waiver for Preliminary Issues of Concern" signed by the City and the Union in connection with the list acknowledges that the preliminary list of issues of concern to the Board "shall not be exclusive."
In the next compilation of "Issues in Dispute/Concerns" dated February 17, 2006 (Defendant's Exhibit G), which was distributed to the parties in preparation for the scheduled hearings to follow, Issue No. 120 lists the City, the Union and the Board as the "Moving Party" the "Topic" as "Duration" and the concern box states "City proposes revision of this provision and elimination of automatic renewal and proposes 4-year duration; Union proposes 3-year duration." The last paragraph of the face sheet of the arbitration document advises the parties that, "[a]ll paragraphs identified below are of concern to the Board. The Board reserves the right to identify other issues of concern not raised in this document."
Likewise, the issue of the duration of the new agreement appears as Issue No. 120, along with other issues remaining in dispute, in the "Waterbury Financial Planning and Assistance Board's Arbitration Statement" dated March 3, 2006 (Defendant's Exhibit K) provided by the Board to the parties. The caption face sheet concludes with a separate paragraph advising the parties that, "[f]inally, the Board reserves its rights to fully exercise its powers under Special Act 01-1 in rendering an award on this matter."
Awareness or discussion of the duration also appears in the transcript of the Board's hearings. As part of the opening statements to the Board, the Union's attorney in criticizing some of the preliminary proposals, acknowledged the significance of the length of the contract being considered:
Some of these changes are so minuscule, so unnecessary, so gratuitously violent to labor relations that you will have those changes for one contract. As soon as we get real arbitration you're going to lose all of those issues back. So that means you're going to have the use of that language for a couple of years. (Transcript, February 14, 2006, pgs. 27-28).
The record shows that the duration issue was also brought up at the same hearing as part of the overall discussion of the arbitration process:
Also duration is an open issue. The City has proposed — that would expire in June of 2009 and the Union has proposed 2008. (Transcript February 14, 2006, p. 43 at lines 10-12).
At the February 15, 2006 hearing, the Chairperson of the Board invited discussion of duration of the contract and the parties presented their positions.
CHAIRPERSON DAKERS: I guess it was suggested 339, duration. Peter, do you want to start off? MR. ABARE-BROWN: Sure: Duration is pretty much from the City's side being driven by staggering contracts. This year has been burdensome. I think we've done nine contracts and so we're at least trying to stagger them out over the years and we've got a bunch at 2008 now and we've got some at 2009 and some at 2010. And we have select — we have proposed 2009, which makes it a three year contract and that certainly isn't unusual for collective bargaining agreements. Actually, that makes it a four year contract. MR. SCHEINBERG: Well, do I have to state the obvious? COURT REPORTER: Excuse me. Just move the mic. over closer to you. MR. SCHEINBERG: I guess I do. I have to state it twice. Obviously the Union would like the quickest possible opportunity to come back to the negotiating table presumably in an MERA sponsored arbitration in order to try to recoup some of the language that the City is seeking to steal in 2006. It's that simple. Shortest duration works for us. Anything else I told you on this issue would be patronizing and dishonest. CHAIRPERSON DAKERS: Anything else on the issue? If not- MR. SCHEINBERG: That's and/or dishonest.
Furthermore, the Union's last best offer dated March 10, 2006 (Plaintiff's Exhibit 4) submitted as paragraph 339, contained the proposal that the effective date of the new agreement be "the effective date of the arbitration award . . ." and that the labor agreement "shall remain in effect through June 30, 2008."
The Union asserts that since the Union's last best offer was a three-year contract and the City's last best offer called for a four-year contract, the Award must be vacated as a result of the Board's failure to give notice of the possibility of a five-year contract. The application to vacate the Award states "[m]ost surprisingly, the WFPAB [Board] awarded remedies of which the Union had never been notified. Since the Union never received notice of these issues, the Union was not afforded any hearing on these issues, or opportunity to submit evidence or briefs with respect to the issues." (Emphasis in original.)
Among the reasons for the five-year duration of the contract, the Board stated in the Award (Defendant's Exhibit M) that: "The Board's award of a 5-year duration seeks to achieve stability and fix costs for an extended duration. Additionally, the Board seeks to stagger the expiration dates of the City's various collective bargaining agreements to avoid a situation where all or even a majority of the contracts expire in the same year. Finally, the Board also notes that a 5-year duration is not unusual with respect to this bargaining unit. The agreement negotiated by the parties prior to the Board's inception was effective 1995-2000." (Defendant's Exhibit M, 314.) Moreover, the court notes that the Union's advocacy for a three-year duration while also submitting four-year proposed wage increases is further evidence that the Union had reason to believe that duration remained an open issue which could be determined by the Board within its discretion.
The Union's due process arguments seem to be that the Board was required to limit its ultimate decision to the confines of the specific issues presented at the hearings or that the Board was somehow required to "tip its hand" and allow the Union an opportunity to challenge the Board's determinations before they became final. Not only are these arguments hollow in the face of the evidence in the record and the fact that the expired contract had a duration of five years, but they also completely ignore § 11(4)(A) of the Act which provides, in part, that, "[I]n establishing the terms of the agreement, as well as making a determination to reject a proposed agreement, the parties shall have an opportunity to make a presentation to the board. The board shall not be limited to consideration and inclusion in the collective bargaining agreement of matters raised or negotiated by the parties." (Emphasis added.)
The court finds that the Union had abundant reason to anticipate the possibility that the duration of the Award could be up to five years and was provided with sufficient opportunity to present evidence in opposition to such result. Accordingly, the Union's claim that it was denied notice and due process with respect to the issue of duration is contradicted by evidence in the record and without merit.
B. General Wage Increase Issue
With respect to the matter of wages, there is also substantial evidence in the record that the Board provided the parties with adequate notice of the Board's concerns and the opportunity to be heard.
In Defendant's Exhibit F entitled "Waterbury Financial Planning and Assistance Board's Preliminary Issues of Concern" dated December 21, 2005, Issue No. 36 lists "Position Classification and Wages" (General Wage Increases) as an issue of concern to the Board. Additionally, in both the list of "Issues in Dispute/Concerns" dated February 17, 2006 (Defendant's Exhibit G) and the Board's "Arbitration Statement" dated March 3, 2006 (Defendant's Exhibit K), the topic of general wage increases appears as Item 39 with the comment "Union proposes . . . GWI of 8.5%, 5%, 5% and 5%; Board concerned with financial cost."
The record further reveals that the topic of general wage increases was discussed at the February 14, 2006 hearing (Transcript, February 14, 2006, pgs 23-24 49) and passing reference to general wage increases was made by the Union at the February 21, 2006 hearing. (Defendant's Exhibit H, 130.) Moreover, in the Union's last best offer dated March 10, 2006, (Plaintiff's Exhibit 4-Issue 39(b), (c), (d), and (e)), the Union proposed four-year annual wage increases of 6%, 3.5%, 3.5% and 3.5%. and in the Union's sixty-six-page "Brief and Final Argument" dated March 15, 2006 (Defendant's Exhibit L), the Union devoted pages 29-37 to the issue of wage increases.
Finally, the court notes that, although the Union and the City were extended the opportunity to submit reply briefs on all issues by March 20, 2006, (Transcript, March 2, 2006, p. 61, lines 16-19), neither party availed itself of the opportunity to submit a reply brief.
With respect to the Union's denial of due process claim, the court finds substantial evidence in the record which shows that the Union was provided with sufficient notice that the issues of the duration of the new contract and the general wage increases thereunder were important issues of concern to the Board and that the Union was afforded multiple opportunities to be heard on those issues. Moreover, the record shows that the parties were made aware of the provision in Section 11(4)(A) of the Act that "The board shall not be limited to consideration and inclusion in the collective bargaining agreement of matters raised or negotiated by the parties." The court also finds that, given the variety of the issues raised and discussed by the parties, the scope and length of the hearings and proceedings conducted by the Board, as well as the broad discretion granted the Board under the provisions of § 11(4)(A), the Union's claim that it was denied due process with respect to the additional issues cited in the Union's brief (mileage, caps on accumulated sick days, educational leave and retirement health insurance premiums payable by employees hired after the date of the Award) is also without merit.
II The Board Exceeded its Statutory Powers
Section 52-418(a)(4) provides, in part, that the court shall make an order vacating an award "if the arbitrators have exceeded their powers or so imperfectly executed them that a mutual, final and definite award upon the subject matter submitted was not made."
In paragraph 13 of its application to vacate the Award, the Union asserts that the Board "exceeded its statutory powers or so imperfectly executed them that a mutual, final and definite award upon the subject matter submitted was not made." (Emphasis added.)
The test to determine whether an arbitration panel has exceeded its powers under § 52-418(a)(4), is clearly stated under our case law. "In deciding whether an arbitrator has exceeded his power, we need only examine the submission and the award to determine whether the award conforms to the submission." (Internal quotation marks omitted.) OG/O'Connell Joint Venture v. Chase Family Limited Partnership No. 3, 203 Conn. 133, 153, 523 A.2d 1271, 1281 (1987). Since the Union has aptly pointed out that the arbitration proceeding which is the subject of this action was statutory (or compulsory) rather than consensual arbitration, no submission was made to the Board and therefore a determination of whether the Board exceeded its powers on those grounds is not applicable or required.
III Violation of Public Policy
"In spite of the general rule that challenges to an arbitrator's authority are limited to a comparison of the award to the submission, an additional challenge exists under § 52-418(a)(4) when the award rendered is claimed to be in contravention of public policy." (Internal quotation marks omitted.) State v. AFSCME, AFL-CIO, Council 4, Local 2663, CT Page 3301 257 Conn. 80, 89-90, 777 A.2d 169 (2001).
"The party challenging an arbitration award bears the burden of proving that illegality or conflict with public policy is clearly demonstrated." New Haven v. AFSCME, Council 15, Local 530, 208 Conn. 411, 417, 544 A.2d. 186 (1988). "The public policy exception applies only when the award is clearly illegal or clearly violative of a strong public policy." Garrity v. McCaskey, supra, 223 Conn. 7.
"[G]iven the narrow scope of the public policy limitation on arbitral authority, the plaintiff can prevail in the present case only if it demonstrates that the [arbitrator's] award clearly violates an established public policy mandate." (Internal quotation marks omitted.) Watertown Police Union Local 541 v. Watertown, 210 Conn. 333, 340, 555 A.2d 406 (1989).
"The proper standard of review for examining whether an arbitral decision violates a clear public policy was recently articulated in Schoonmaker v. Cummings Lockwood of Connecticut, P.C., 252 Conn. 416, 429, 747 A.2d 1017 (2000), in which our Supreme Court stated: Where there is no clearly established public policy against which to measure the propriety of the arbitrator's award, there is no public policy ground for vacatur. If, on the other hand, it has been determined that an arbitral award does implicate a clearly established public policy, the ultimate question remains as to whether the award itself comports with that policy." (Internal quotation marks omitted.) International Brotherhood, supra, 81 Conn.App. 733.
"We interpret Schoonmaker to require a two-step analysis in cases such as this one in which a party raises the issue of a violation of public policy in a arbitral award. First, we must determine whether a clear public policy can be identified. Second, if a clear public policy can be identified, we must then address the ultimate question of whether the award itself conforms with that policy." State v. AFSCME, Council 4, Local 2663, AFL-CIO, 59 Conn.App. 793, 797, 758 A.2d 387, cert. denied, 255 Conn. 905, 762 A.2d 910 (2000).
In its brief, the Union asserts that language in Section 20 of the Act "requires the WFPAB [Board] to adhere to MERA" with respect to the procedures to be followed in compulsory binding interest arbitration for municipal employees. The Union's claim that the procedural requirements of MERA were applicable and were ignored by the Board requires a determination that the Board's failure to apply and follow MERA precludes enforcement of the Award by the court because to do so would be in contravention of clearly established public policy.
The Union further asserts that the Board "violated clearly established public policy for compulsory interest arbitration, and procured the arbitration award by undue means, exceeded its statutory powers, and acted with partiality in violation of Conn. Gen. Stat. § 52-418." As noted earlier, the claim of partiality was abandoned. The Union's claim that the Board procured the Award by undue means is discussed elsewhere in this memorandum of decision.
"[T]he public policy exception to arbitral authority should be narrowly construed and [a] court's refusal to enforce an arbitrator's interpretation of [collective bargaining agreements] is limited to situations where the contract as interpreted would violate some explicit public policy that is well defined and dominant, and is to be ascertained by reference to the laws and legal precedents and not from general considerations of supposed public interests." (Emphasis added, citation omitted; internal quotation marks omitted.) State v. AFSCME, Council 4, Local 2663, AFL-CIO, supra, 59 Conn.App. 797-98.
"The public policy exception applies only when the award is clearly illegal or clearly violative of a strong public policy . . . A challenge that an award is in contravention of public policy is premised on the fact that the parties cannot expect an arbitration award approving conduct which is illegal or contrary to public policy to receive judicial endorsement any more than parties can expect a court to enforce such a contract between them . . . When a challenge to the arbitrator's authority is made on public policy grounds, however, the court is not concerned with the correctness of the arbitrator's decision but with the lawfulness of enforcing the award . . . Accordingly, the public policy exception to arbitral authority should be narrowly construed and [a] court's refusal to enforce an arbitrator's interpretation of [collective bargaining agreements] is limited to situations where the contract as interpreted would violate some explicit public policy that is well defined and dominant, and is to be ascertained by reference to the laws and legal precedents and not from general considerations of supposed public interests . . . The party challenging the award bears the burden of proving that illegality or conflict with public policy is clearly demonstrated . . . Therefore, given the narrow scope of the public policy limitation on arbitral authority, the plaintiff can prevail in the present case only if it demonstrates that the [arbitrator's] award clearly violates an established public policy mandate." (Internal quotation marks omitted.) State v. AFSCME, AFL-CIO, Council 4, Local 2663, 257 Conn. 80, 90-91, 777 A.2d 169 (2001).
Section 20 of the Act provides: "This act is intended to authorize the city to fund its accumulated deficits, to establish a board to review the financial affairs of the city in order to maintain access to the public markets and to restore financial stability to the city, and shall be liberally construed to accomplish its intent. The provisions of this act shall supersede any provisions of the general statutes, any public or special act and the charter of the city enacted prior to or subsequent to this act other than a subsequent act of the General Assembly which specifically states that it supersedes this act except that, unless expressly provided in this act, nothing in this act shall affect the provisions of the Municipal Employees Relations Act, sections 7-467 to 7-477, inclusive, of the general statutes, or the provisions of the Teacher Negotiation Act, sections 10-153a to 10-153o, inclusive, of the general statutes." (Emphasis added.)
The same question as to the meaning of the foregoing italicized language was raised in School Administrators of Waterbury v. Waterbury Financial Planning and Assistance Board, 276 Conn. 355, 885 A.2d 1219 (2005). In School Administrators, our Supreme Court applied established rules of statutory construction and construed the language to mean that in the event of a conflict between the Act and the Teacher Negotiation Act [or MERA], the provisions of the Act prevail. The Court found additional support for its decision in the legislative finding and purpose of the Act. "[T]he conclusion that, when the two statutes conflict the provisions of S.A. 01-1 prevail over those of the teacher act, is supported by both the language and purpose of S.A. 01-1. Section 1 of S.A. 01-1 declares `that a financial emergency exists' in the city that is `detrimental to the general welfare of the city and the state,' that the city's access to financial markets and the resolution of the emergency are matters `of paramount public interest,' and that to achieve that resolution it is necessary to impose financial management controls and the creation' of the oversight board, `all in order to achieve or maintain access to public credit markets, to fund the city's accumulated deficits and to restore financial stability to the city . . .' Similarly, § 20 of S.A. 01-1 provides that the act `is intended to authorize the city to fund its accumulated deficits, to establish a board to review the financial affairs of the city in order to maintain access to the public markets and to restore financial stability to the city, and shall be liberally construed to accomplish its intent.' In the absence of any clear expression of the legislature to the contrary, these overriding public necessities compel the conclusion that any conflict between the teacher act and the provisions of S.A. 01-1 be resolved in favor of the latter." School Administrators of Waterbury v. Waterbury Financial Planning and Assistance Board, supra, 276 Conn. 372-73.
Applying the foregoing interpretation of the statutory language by the Court in School Administrators to the claim of the Union that the Board was "required" to adhere to MERA procedures with respect to the arbitration proceedings resulting in the Award, this court rejects the Union's claim. The key consideration for the court's conclusion is found in Section 10(b) of the Act which provides, in part, that: "The board shall adopt its own procedures for the conduct of its meetings and exercise of the powers, duties and functions conferred upon it by this act and shall not be subject to the provisions of chapter 54 of the general statutes." (Emphasis added.)
"The use of the word `shall' . . . although not dispositive on the issue of whether a statute's directive is mandatory, suggests that it is so." Pedro v. Miller, 281 Conn. 112, 119 (2007). In this instance, the use of the word "shall" clearly indicates that the legislature intended that the Board establish and apply its own procedures in the exercise of the powers granted, rather than statutory MERA requirements, to which the legislature could have readily referred to in the Act.
In Waterbury Firefighters Ass'n. v. Waterbury, Superior Court, judicial district of Waterbury, Docket No. CV 01 166380 (September 26, 2001, Holzberg, J.), Judge Holzberg rejected a similar claim that asserted the primacy of MERA. "The principal flaw in plaintiff's argument is its assumption that it has an absolute right to conduct its negotiations and arbitrations pursuant to MERA. This assertion ignores the fact that having been established by the legislature, the rules and procedures governing the collective bargaining process can also be modified by the legislature. The plaintiff does not have the right to insist that the legislature be bound in perpetuo by the statutory scheme it established when it created MERA." Id.
Although MERA may apply where the Act is silent, it is clear that the legislature authorized the Board to adopt its own unique procedures to govern the exercise of the powers conferred upon the Board as arbitrator of the City's collective bargaining agreements. To the extent that the procedural requirements which are claimed by the Union to be applicable to compulsory binding arbitration under MERA are at variance with the procedures followed by the Board pursuant to the authority granted to the Board by the Act, the procedures followed by the Board prevail. Beyond the express grant of authority in the Act, this conclusion finds additional support in the legislative purpose to permit the Board to respond to the dire fiscal conditions described in the Act as a "financial emergency" in the City, all in the midst of what the Supreme Court has characterized as "the unique legal landscape" in which this and other challenges to the Board's actions have arisen. School Administrators of Waterbury v. Waterbury Financial Planning and Assistance Board, supra, 276 Conn. 365.
Even if the court were to agree with the Union's contention that MERA procedures were applicable to the subject arbitration proceedings, such finding, by itself, would not be sufficient grounds to vacate the Award. "[Courts] are not at liberty to set aside an [arbitrator's] award because of an arguable difference regarding the meaning or applicability of laws urged upon it." (Internal quotation marks omitted.) Garrity v. McCaskey, supra, 223 Conn. 9. "Even if an arbitrator misapplies the relevant law, such a misconstruction of the law [does] not demonstrate the arbitrator['s] egregious or patently irrational rejection of clearly controlling legal principles." (Internal quotation marks omitted.) National Association v. Bridgeport, 99 Conn.App. 54, 61, 912 A.2d 539 (2007)
Our Supreme Court has established a test to determine whether the law has been manifestly disregarded by an arbitrator in arriving at an award. "The test consists of the following three elements, all of which must be satisfied in order for a court to vacate an arbitration award on the ground that the arbitration panel manifestly disregarded the law: (1) the error was obvious and capable of being readily and instantly perceived by the average person qualified to serve as an arbitrator; (2) the arbitration panel appreciated the existence of a clearly governing legal principle but decided to ignore it; and (3) the governing law alleged to have been ignored by the arbitration panel is well defined, explicit, and clearly applicable." (Citations omitted; internal quotation marks omitted.) Saturn Construction Co. v. Premier Roofing Co., 238 Conn. 293, 304-05, 680 A.2d 1274 (1996).
"[T]he manifest disregard of the law ground for vacating an arbitration award is narrow and should be reserved for circumstances of an arbitrator's extraordinary lack of fidelity to established legal principles." (Internal quotation marks omitted.) Harty v. Cantor Fitzgerald Co., supra, 275 Conn. 72, 102, 881 A.2d 139 (2005).
A party seeking to vacate an arbitration award which is claimed to have been awarded in manifest disregard for the law must show not only that the arbitrator appreciated the existence of a well defined, explicit and clearly applicable legal principle, but also that he deliberately ignored the governing law. Garrity v. McCaskey, supra, 223 Conn. 9.
"The exceptionally high burden for proving a claim of manifest disregard of the law under § 52-418(a)(4) is demonstrated by the fact that, since the test was first outlined in Garrity, this court has yet to conclude that an arbitrator manifestly disregarded the law." Economos v. Liljedahl Bros., Inc., 279 Conn. 300, 307 n. 8, 901 A.2d 1198 (2006).
As pointed out in State v. AFSCME, supra, in order to deny enforcement of the Award on public policy grounds, the Union must show that the Award, rather than the actions of the Board, violates some "explicit public policy that is well defined and dominant" not "supposed public interests." When a challenge to the arbitrator's authority is made on public policy grounds, the court is not concerned with the correctness of the arbitrator's decision but with the lawfulness of enforcing the award. Board of Trustees v. Federation of Technical College Teachers, supra, 179 Conn. 195.
Neither the express terms of the Act nor any other statutory or common law brought to the attention of the court by the Union evidences any well defined, explicit and dominant public policy which prohibited the Board from applying the procedures it followed to the compulsory interest arbitration which resulted in the Award. Moreover, the court cannot say that there can be only one conclusion as to the applicable law nor that the actions taken and procedures followed by the Board were in complete disregard of the law. Accordingly, the court finds that the Union's claims that the Award should be vacated on the grounds that the Board exceeded its statutory powers, that the Board failed to follow "applicable MERA procedures," or that judicial enforcement of the Award would violate clearly established public policy are all without merit.
Finally, the Union suggests that since the Board provided a lengthy explanation of only two of the factors it considered (i.e. the public interest and the City's ability to pay), the Award should be vacated. The Union misconstrues the law. "Arbitrators need not disclose the facts or reasons behind their award unless the arbitration agreement or submission, or an applicable statute, requires them to do so. Otherwise, they are no more bound to go into particulars, or to give reasons for their award, than a jury for is for its verdict." 4 Am.Jur. 219-20, Alternative Dispute Resolution, § 193 (1995). "Arbitrators are only required to render an award in conformity to the submission and an award need contain no more than the actual decision of the arbitrators. An explanation of the means by which they reached the award, unless required by the submission, is needless and superfluous." Malecki v. Burnham, 181 Conn. 211, 213, 435 A.2d 13 (1980).
The failure of the Board to recite all the factors that it considered in arriving at the Award, the weight given to any factor or the reasons for its decision is of no legal significance.
IV Undue Means
The Union asserts in its brief that the Award should be vacated as having been "procured by undue means in violation of § 52-418(a)(1)." The Union directs the court to OG/O'Connell v. Chase Family Ltd. Partnership, 203 Conn. 133, 156, 523 A.2d 1271 (1987) and 13 Connecticut Practice Series, § 9:11, Vacating Award, (2005), in support of its argument that the failure of an arbitration party to receive adequate notice of a claim and an opportunity to address that claim provides the basis for a finding that the award has been "procured by undue means." The Union also cites Milford v. J.H. Hogan, Inc., Superior Court, judicial district of Ansonia-Milford, Docket No. CV 91 034239 (May 7, 1991, Fuller, J.) [ 4 Conn. L. Rptr. 31] in support of its claim.
The Union's argument focuses on the words "undue means" and fails to consider the entirety of § 52-418(a)(1) which provides that an award may be vacated as defective "[i]f the award has been procured by corruption, fraud or undue means" (emphasis added) OG/O'Connell and Milford are distinguishable from the present matter in that they both involved applications to vacate arbitration awards that were claimed to have been procured by a party by undue means. In OG/O'Connell, the thrust of the claim was that the adverse party has "manipulated the proceedings by waiting until it submitted its post-hearing brief to raise its claim for lost opportunity damages." Id., 155. In finding that the adverse party had "presented some evidence" in support of its claim at the hearing, the court found that the applicant had sufficient notice of that claim and held that the award was not procured by undue means. Similarly, in the Milford case, the claim was also that a party had gained an advantage and procured an award by undue means.
In commenting on § 52-418(a), the author of the Connecticut Practice Series states that "[t]here is sparse authority interpreting the first ground [procuring an award by corruption, fraud or undue means]" and goes on to cite OG/O'Connell. 13 Connecticut Practice Series, § 9:11, 195. In view of the sparse Connecticut legal authority interpreting the "procured by undue means" grounds for vacating an award, it is appropriate to look to other authorities to assist with the analysis.
The federal statute that provides for vacating an arbitration award, 9 U.S.C. § 10(d), is virtually identical to General Statutes 52-418. "The Connecticut Municipal Employee Relations Act, like the Connecticut Labor Relations Act originally enacted in 1945, is closely patterned after the National Labor Relations Act, as amended, which a comparison of the two acts clearly demonstrates." Windsor v. Windsor Police Department Employees Ass'n., Inc., 154 Conn. 530, 536, 227 A.2d 65 (1967). The Supreme Court has stated that it is for this reason that "the judicial interpretation frequently accorded the federal act is of great assistance and persuasive force in the interpretation of our own act." Imperial Laundry, Inc. v. Connecticut State Board of Labor Relations, 142 Conn. 457, 460, 115 A.2d 439 (1955). "Challenges to awards on the grounds of `undue means' are rare; only two district courts have vacated an award on this basis to date, and both cases were later reversed." The Alternative Dispute Resolution Practice Guide, § 14.8, 13-14, 2003. The same language for vacating an arbitration award is used in The Federal Arbitration Act, 9 U.S.C. § 10:
(a) In any of the following cases the United States court in and for the district wherein the award was made may make an order vacating the award upon the application of any party to the arbitration —
(1) where the award was procured by corruption, fraud, or undue means;
In PaineWebber Group, Inc. v. Zinsmeyer Trusts Partnership, 187 F.3d 988 (8th Cir. 1999), where one party had withheld documents from discovery, the 8th Circuit Court reversed the decision of the District Court to vacate the award as having been procured by undue means. The Court held that the phrase "undue means" had to be read in conjunction with the words "corruption" and "fraud" that preceded it and that "[c]onsistent with the plain meaning of fraud and corruption, and with the limited scope of judicial review of arbitration awards, other circuits have uniformly construed the term undue means as requiring proof of intentional misconduct. See American Postal Workers Union, AFL-CIO v. United States Postal Service, 52 F.3d 359, 362 (D.C. Cir. 1995) (undue means limited to conduct "equivalent in gravity to corruption or fraud, such as a physical threat to an arbitrator"); A.C. Edwards Sons, Inc. v. McCollough, 967 F.2d 1401, 1403 (9th Cir. 1992) (undue means "connotes behavior that is immoral if not illegal"), cert. denied, 506 U.S. 1050 (1993); Shearson Hayden Stone, Inc. v. Liang, 493 F.Sup. 104, 108 (N.D.Ill. 1980) (" `undue means' requires some type of bad faith in the procurement of the award"), aff'd, 653 F.2d 310 (7th Cir. 1981)." Id., 991.
"The meaning of a statute shall, in the first instance, be ascertained from the text of the statute itself and its relationship to other statutes. If, after examining such text and considering such relationship, the meaning of such text is plain and unambiguous and does not yield absurd or unworkable results, extratextual evidence of the meaning of the statute shall not be considered." General Statutes § 1-2z.
"In the construction of the statutes, words and phrases shall be construed according to the commonly approved usage of the language . . ." General Statutes 1-1(a). Webster's Dictionary lists as the first usage of the word "procure" as "to get possession of; obtain by particular care and effort" Merriam-Webster's Dictionary (10th Ed. 1998). In the present case, the Award was not "procured" or taken possession of but was issued by the Board pursuant to its powers under the Act. The use in § 52-418(a)(1) of the words "procured by' undue means, rather than "arrived at' or "determined by" undue means, plainly evidences the intention of the legislature to allow judicial review of an arbitration award where a party, rather than the arbitrator, has engaged in misconduct. This is made even clearer by § 52-418(a)(1), (2) and (3) which specifically address bias, corruption or other misconduct by the arbitrator. The court finds that the Union has failed to prove that the Award was procured by fraud, corruption or undue means as provided in § 52-418(a)(1).
See footnote 4.
V Unconstitutional Delegation
`The Union claims that the Act is an unconstitutionally overbroad delegation of legislative power in violation of Article Second and Article Third, 1 of the Connecticut Constitution and is therefore unenforceable. The Union's contention is that the Act violates constitutional principles of separation of powers because the Act does not provide adequate standards to guide the Board in carrying out its duties under the Act. "Failing to establish standards or by excusing the WFPAB from complying with MERA standards (i.e. the statutory factors), the legislature essentially transferred a legislative function to another branch of government." (Union's brief, 25.) "[W]hile the courts may declare a statute to be unconstitutional, our power to do this should be exercised with caution, and in no doubtful case." (Internal quotation marks omitted.) Ciordano v. Ciordano, 39 Conn.App. 183, 188-89, 664 A.2d 1136 (1995). "[I]n passing upon the constitutionality of a legislative act, we will make every presumption and intendment in favor of its validity . . . The party challenging a statute's constitutionality has a heavy burden of proof; the unconstitutionality must be proven beyond all reasonable doubt." (Internal quotation marks omitted.) Bottone v. Westport, 209 Conn. 652, 657, 553 A.2d 576 (1989); Rudy's Limousine Service, Inc. v. Dept. of Transportation, CT Page 3310 78 Conn.App. 80, 89, 826 A.2d 1161 (2003).
The constitution of Connecticut, article second, as amended by article eighteen of the amendments, provides in relevant part: "The powers of government shall be divided into three distinct departments, and each of them confided to a separate magistracy, to wit, those which are legislative, to one; those which are executive, to another; and those which are judicial, to another . . ." The constitution of Connecticut, article third, § 1, provides: "The legislative power of this state shall be vested in two distinct houses or branches; the one to be styled the senate, the other the house of representatives, and both together the general assembly. The style of their laws shall be: Be it enacted by the Senate and House of Representatives in General Assembly convened."
"Whenever the constitutionality of a statute is challenged, we must attempt to find reasonable grounds upon which it can be upheld . . . We assume that the legislature intended to achieve a purpose by an enactment that meets constitutional requirements." Bottone v. Westport, supra, 209 Conn. 673.
A. VIOLATION OF ARTICLE SECOND CLAIM
The threshold issue raised by the Union's assertion is to determine whether the claim of unconstitutional delegation of legislative authority in violation of Article Second is applicable to the present matter.
"The primary basis for the nondelegation doctrine as between the coequal branches of government is the separation of powers doctrine." Id., 660.
"The United States Supreme Court has made it clear that the concern for separation of powers is the driving force behind the nondelegation doctrine." Id., 662.
"Similarly, we have recognized the fundamental nature of the separation of powers doctrine of the constitution of Connecticut, article second and article third, § 1, in our nondelegation doctrine . . . Although the language of the constitution of Connecticut is more specific than that of the constitution of the United States in separating the coequal branches of government, we too have recognized the practical necessity of the delegation of powers." (Citations omitted.) Id., 662-63.
"[W]e conclude that the rule limiting the delegation of legislative power between coequal branches of state government is not the appropriate rule to govern the delegation of legislative power from the state to a municipality. The underpinning of the rule governing the former delegation, i.e., separation of powers, is not applicable to the latter delegation. Instead, due process provides the sounder standard to govern the delegation of legislative authority to a municipality." Id., 667.
Although the Board is clearly not a municipality, the non-delegation doctrine grounded in the concern that the co-equal branches of government remain separate is similarly inapposite to the delegation of powers to the Board by the legislature. The Board was created by a special act of the legislature for a limited purpose, in response to a declared state of emergency and was granted limited existence. The Union has not alleged that the Board is part of the executive branch of government nor is the Board a unit, division or part of any executive department enumerated in General Statutes § 4-38c, by which the executive departments of state government are statutorily established. Although Section 10(a) of the Act states that the Board "shall be in the Office of Policy and Management" those words are immediately qualified by the important statutory term "for administrative purposes only." Connecticut General Statutes § 4-38f provides, in part, that an agency assigned to a department "for administrative only" shall: "(1) Exercise any quasi-judicial, rule making or regulatory authority, licensing and policy making functions which it may have independent of such department and without approval or control of the department . . ." (Emphasis added.) Nothing in the Act makes the Board directly accountable to the executive branch or indicates that its members serve at the pleasure of the executive. The Board is authorized by the legislature to function autonomously and is merely required by Section 11(a)(17) of the Act to "Report" to the Governor and the General Assembly" every six months " regarding the fiscal condition of the city . . ." (Emphasis added.) Further support for the conclusion that the Board is not part of the executive branch and that the legislature did not delegate its lawmaking power to a coequal branch of government is found in Section 10(c) of the Act which provides that "[a]ll expenses of the board . . . shall be paid by the city . . ." and, as previously noted, under Section 10(b) of the Act, the Board is not subject to the Uniform Administrative Procedures Act as are all other state agencies.
Special Acts 2001, No. 1, § 14. (a) provides "[t]he board shall remain in existence and exercise the powers, duties and functions granted to it by this act until such time as the general fund, special revenue funds, enterprise funds, and internal service funds of the city shall have, for five consecutive fiscal years, maintained a positive unreserved fund balance, retained earnings balance, in accordance with audits Required by the general statutes and the board, by resolution, determines that: (1) There have been no annual budgetary deficits for the general fund of the city for five consecutive fiscal years; (2) the city has presented and the board has approved a financial plan that projects positive unreserved fund balances and retained earnings for the general fund, special revenue funds enterprise funds and internal service funds for the three succeeding consecutive fiscal years covered by such financial plan in accordance with generally accepted accounting principles and this act; and (3) the audits for five consecutive fiscal years have been completed and are unqualified relating to the annual reporting of results of operations for all governmental funds, enterprise funds, and internal service funds."
The court concludes that the underpinnings of the rule limiting the delegation of legislative powers do not apply to the powers granted by the legislature to the Board under the Act. Having concluded that the delegation of powers to the Board does not violate the provisions of Article Second, the court needs to address the Union's claim that the powers conferred on the Board were impermissibly broad in violation of Article Third, § 1.
B. VIOLATION OF ARTICLE THIRD, SECTION 1
Unlike Article Second which places limits on the transfer of powers between the separate branches of government, Article Third, Section 1 grants all legislative power to the general assembly. "The broad grant of the legislative power of the state to the General Assembly, in Article Third, is unqualified." State v. Coleman, 96 Conn. 190, 192, 113 A. 385 (1921) `Therefore, while Article Third, § 1, expressly vests the legislative power in the General Assembly, it does not prohibit the General Assembly from delegating its legislative power." Bottone v. Westport, supra, 209 Conn. 666.
"[I]n order that a court may be justified in holding a statute unconstitutional as a delegation of legislative power, the power involved must be one that is purely legislative in nature that is, one appertaining exclusively to the legislative department. It is the nature of the power, and not the liability of its use or the manner of its exercise, which determines the validity of its delegation" 16A Am.Jur.2d 221-2, Constitutional Law § 295, (1998). "Thus, the rule does not bar Congress or other legislatures from delegating such of their powers as are not strictly legislative in nature." 16A Am.Jur.2d 223 Constitutional Law § 297 (1998).
The powers granted to the Board in § 11(a) of the Act, although considerable, are administrative in nature. Throughout § 11(a), the Board is given the power to "review," "approve," "monitor," "appoint" "audit," "study" or to perform similar administrative functions that cannot be characterized as strictly legislative in nature.
The court believes that the circumstances which led to the passage of the Act and creation of the Board cannot be overemphasized. The dire fiscal crisis that threatened the financial solvency of the City and compelled the legislature to act has been described elsewhere in this memorandum. The legislative history is telling. The Act was introduced by the Speaker of the House and President Pro Tempore of the Senate under their emergency certification authority. As further evidence of the compelling and urgent need for the Act, it was passed, without a public hearing, by both the House and Senate on the same day and signed the next day by the Governor. The extraordinary nature of the legislative action underscores the seriousness with which the legislature viewed the emergency that confronted the City and serves to provide the context, by which to gauge the validity of the legislative response. (Legislative Record Index, January 2001 Regular Session, p. N-104).
See footnote 1.
"The law-making power is in the legislative branch of our government and cannot constitutionally be delegated . . . but the General Assembly may carry out its legislative policies within the police power of the state by delegating to an administrative agency the power to fill in the details . . . In order to render admissible such delegation of legislative power, however, it is necessary that the statute declare a legislative policy, establish primary standards for carrying it out, or lay down an intelligible principle to which the administrative officer or body must conform." (Citations omitted; internal quotation marks omitted.) New Milford v. SCA Services of Connecticut, Inc., 174 Conn. 146, 149, 384 A.2d 337 (1977)
"If the policy and purpose of the legislature are clearly expressed, the absence of detailed standards in legislation will not necessarily render it invalid as an unlawful delegation of legislative authority. The standards for the action to carry out the declared legislative policy may be found not only in express provisions of an act, but also in its necessary implications." 16A Am.Jur.2d, 225, Constitutional Law § 297 (1998).
In this case, the legislature stated the public policy behind the Act and laid down an intelligible principle to which the Board was required to conform in Section 1 of the Act, in which it declared that "the financial emergency is detrimental to the general welfare of the city" and cited the necessity to provide for "the imposition of financial management controls and the creation of the Waterbury Financial Planning and Assistance Board to review the financial affairs of the City of Waterbury in order to achieve or maintain access to public credit markets, to fund the city's accumulated deficits and to restore financial stability to the City of Waterbury."
As noted above, the legislature granted the Board the authority to "adopt its own procedures" for the "exercise of its powers" to respond to the financial crisis which was declared to be "detrimental to the general welfare" of the City.
In Section B.11 of its Proposed Bargaining Rules the Board provided that "[i]n arriving at a decision, the arbitration panel shall give priority to the public interest and the financial capability of the municipal employer, including consideration of other demands on the financial capability of the municipal employer. The panel shall further consider the following factors in light of such financial capability: (A) The negotiations between the parties prior to arbitration; (B) the interests and welfare of the employee group; (C) changes in the cost of living; (D) the existing conditions of employment of the employee group and those of similar groups; and (E) the wages, salaries, fringe benefits, and other conditions of employment prevailing in the labor market, including developments in private sector wages and benefits." (Defendant's Exhibit N.) This provision is identical to Connecticut General Statutes § 7-473c(9) of MERA which the Union has asserted that the Board needed to apply to the proceedings. Moreover, the Board, on page 3 of the Award, restated the same statutory factors applicable to its "Decision and Award."
A similar constitutional challenge, albeit on different grounds, was made to the collective bargaining and binding arbitration provisions of Special Acts 92-5, which created an oversight board with goals and objectives nearly identical to those of the Board to respond to a similar fiscal crisis in the city of West Haven. In AFSCME, Council 4, Local 681 v. West Haven, 43 Conn.Sup. 470, 502-03 (1994), sustained 234 Conn. 217 (1995), 661 A.2d 587, Judge Sheldon concluded [t]he circumstances surrounding the passage of the special act give overwhelming evidence that the special act serves a legitimate governmental purpose. The imposition of financial and other controls, including those related to collective bargaining between the city and its unions, were appropriate measures taken by the state to ensure that the city would survive its immediate crisis, adopt new and better financial management practices, and not encourage other distressed municipalities to follow its lead." Id., 502-03.
"As the complexity of economic and governmental conditions has increased over the years, courts have tended to approve ever broader standards to facilitate the operational functions of administrative agencies." Wilson v. Connecticut Product Development Corporation, 167 Conn. 111, 120, 355 A.2d 72 (1974).
"Necessity fixes the point beyond which it is unreasonable and impracticable to compel the legislature to prescribe detailed rules for a delegation of legislative power." 16A Am.Jur.2d. 225, Constitutional Law, § 297 (1998).
"The test for constitutionally sufficient standards to govern the exercise of delegated powers requires only that the standards be as definit[e] as is reasonably practicable under the circumstances." (Internal quotation marks omitted.) State v. Campbell, 224 Conn. 168, 180, 617 A.2d 889 (1992), cert. denied, 508 U.S. 919, 113 S.Ct. 2365, 124 L.Ed.2d 271 (1993). "[T]he legislative process would frequently bog down if the General Assembly were constitutionally required to appraise beforehand the myriad situations to which it wishes a particular policy to be applied . . . To require any more specificity in the standards . . . would hamper the flexibility needed [for the department to carry out its duties]." (Internal quotation marks omitted.) University of Connecticut Chapter, AAUP v. Governor, 200 Conn. 386, 398-99, 512 A.2d 152 (1986).
The claim that the powers granted to the Board were unconstitutionally over broad is rejected. The court finds that the legislature clearly stated the public policy behind the Act and properly laid down an intelligible principle and standard for the board to follow that was reasonable and appropriate to the circumstances and necessary to fulfill the urgent and legitimate governmental purpose of restoring financial stability to the City of Waterbury.
For all of the foregoing reasons, the Union has failed to meet its burden to show that there is any basis for vacating the Award. Accordingly, the Union's application to vacate the Award is denied.