New York City v. Transport Workers Union of America

OPINION OF THE COURT Miller, J. The issue presented in this proceeding is whether an arbitrator exceeded his authority within the meaning of CPLR 7511 (b) (1) (iii) when, in the context of a disciplinary arbitration arising under the parties’ collective bargaining agreement (hereinafter the CBA), having found that an employee had commit — 3 — ted the underlying offense charged by the employer, he reduced the employer’s penalty from dismissal to a reinstatement without back pay. Given the language of the relevant CBA provision, under the circumstances presented, we conclude that he did. I The petitioner, New York City Transit Authority (hereinafter the TA), charged one of its employees, a subway conductor, with verbally abusing and assaulting a customer at a station platform on April 14, 2006. The TA’s postincident investigation revealed that on the occasion in question, the employee instigated an altercation with the customer after the customer inquired about express service at the platform. In the course of the altercation, the employee grabbed the customer by his collar and shoved him against a platform column. The customer claimed that he was released after about 10 to 15 seconds, and that the attack left a red hand print on his neck, which he observed in the mirror of a station restroom. A TA superintendent who interviewed the customer shortly after the incident in response to the latter’s complaint confirmed through observation that the customer had a red mark on his neck. The employee, who had 21 years of service with the TA, had a prior disciplinary history which included, inter alia, a five-day suspension in 1991 arising from an altercation with a customer. At the time of the April 2006 incident, the TA had in effect a “Zero Tolerance Policy” regarding violence in the workplace. The employee was suspended, and the TA sought his dismissal. Pursuant to the relevant provisions of the CBA between the TA and the employee’s union, Transport Workers Union of America, Local 100 (hereinafter TWU), disciplinary step hearings were held on April 17 and 21, 2006. The charges were sustained at each step, and the penalty of dismissal was upheld. According to the CBA, the next step in the review process was arbitration. The relevant provision of the CBA is article II, § 2.1 (C) (19) (c), which, in pertinent part, reads: “If there is presented to the [arbitrator] for decision any charge which, if proved in Court, would constitute a felony, or any charge involving assault, theft of Authority property, intoxication, use of Controlled Substances, chronic absenteeism, the question to be determined by the [arbitrator] shall be with respect — 4 — to the fact of such conduct. Where such charge is sustained by the [arbitrator], the action by the Authority, based thereon, shall be affirmed and sustained by the [arbitrator] except if there is presented to the [arbitrator] credible evidence that the action by the Authority is clearly excessive in light of the employee’s record and past precedent in similar cases. It is understood by the parties that this exception will be used rarely and only to prevent a clear injustice” (emphasis added). A hearing was held before an arbitrator; thereafter, at the arbitrator’s direction, the parties submitted closing briefs. In its approximately six-page brief, the TA argued that it had made out a prima facie case of assault. The TA further argued that dismissal was an appropriate penalty. Among other things, it argued that an employee’s assault upon a member of the riding public violated the TA’s Zero Tolerance Policy and could not be permitted. Furthermore, it cited previous arbitral decisions in other cases, at least some of which purportedly were verbal harassment and assault cases, in which the arbitrators upheld the penalty of dismissal, which it claimed supported a similar result here. It also pointed out that the employee had a previous disciplinary history, including a prior customer altercation which resulted in a five-day suspension. In its approximately U/a-page closing brief, the TWU argued that based on the evidence before the arbitrator, the assault charge was not established, and that even if it was, the penalty of dismissal was too severe given the employee’s length of service and disciplinary record. The TWU cited no precedent in support of its contention that the penalty of dismissal was too harsh. The arbitrator issued an award in which he sustained the assault charge; however, he reduced the penalty imposed from dismissal to reinstatement without back pay. In his ensuing opinion, the arbitrator quoted the CBA provision set forth above. He found that the employee assaulted the customer. However, on the issue of penalty, he distinguished the previous arbitral decisions the TA had cited, found that the employee was a long-term employee with no disciplinary action in the last 11 of 21 years of his service, and concluded that this case was “worthy of the ‘exception’ ” allowed by the CBA. Thereafter, the TA commenced this proceeding against the TWU and its president, Roger Toussaint, pursuant to CPLR — 5 — article 75, in effect, to vacate so much of the arbitrator’s award as reduced the penalty from dismissal to reinstatement without back pay, contending that the arbitrator exceeded his authority in making the award. The TWU and Toussaint answered the petition, denying its material allegations. The Supreme Court granted the petition, vacated so much of the arbitrator’s award as reduced the penalty, and reinstated the original penalty. The TWU and Toussaint appeal, and we affirm. II The appellants contend that the arbitrator did not find that the employee committed assault. We reject that argument. The arbitrator clearly concluded that the employee had “forcefully ‘laid hands’ ” upon the customer, denied the TWU’s grievance in part, and sustained it only with respect to the purported severity of the penalty of dismissal. Manifestly, the arbitrator found that there had been an assault; his language and disposition of the matter make no sense otherwise. On this point our dissenting colleagues agree. In their view, however, the appellants correctly contend that the arbitrator acted within his authority in overturning the penalty of dismissal. Given the relevant language of the CBA, under the particular facts presented, we take a different view. Where, as here, the parties have voluntarily agreed to arbitrate the subject dispute, judicial review of an arbitration award rendered pursuant to that agreement is governed by the provisions of CPLR 7511 (see Matter of Henneberry v ING Capital Advisors, LLC, 10 NY3d 278, 283 [2008]). An arbitration award may be vacated where there has been corruption, fraud, or misconduct in procuring the award, where the arbitrator exceeded his or her power, or where there was a failure to follow the procedure of CPLR article 75 (id.; see CPLR 7511 [b]). An excess of power within the meaning of CPLR 7511 (b) (1) (iii) occurs “only where the arbitrator’s award violates a strong public policy, is irrational or clearly exceeds a specifically enumerated limitation on the arbitrator’s power” (Matter of New York City Tr. Auth. v Transport Workers’ Union of Am., Local 100, AFL-CIO, 6 NY3d 332, 336 [2005]; see Matter of Henneberry v ING Capital Advisors, LLC, 10 NY3d 278, 284 [2008]; Matter of New York City Tr. Auth. v Transport Workers’ Union of Am., Local 100, AFL-CIO, 306 AD2d 486, 486 [2003]). Here, the language of the CBA makes clear that the arbitrator has plenary authority to determine whether certain enumer — 6 — ated underlying misconduct—in this case an assault—in fact took place. The issue of penalty presents a different situation. The CBA does not grant the arbitrator the power to fashion any penalty he finds appropriate under the circumstances. Rather, assuming he sustains the underlying charge, he is directed to uphold the TA’s action unless credible evidence is presented demonstrating that it is clearly excessive in light of the employee’s record and past precedent in similar cases. Furthermore, the exception is to be used “rarely and only to prevent a clear injustice.” Thus, the arbitrator’s authority on the penalty issue is limited and we have treated it as such in the past (see e.g. Matter of New York City Tr. Auth. v Transport Workers’ Union of Am., Local 100, AFL-CIO, 306 AD2d 486, 487 [2003]; Matter of New York City Tr. Auth. v Transport Workers Union of Am., 239 AD2d 421 [1997]). Turning to the facts of this case, the TA did not specifically contend in its petition, nor does it argue in its brief on appeal, that the penalty of dismissal was appropriate based on the employee’s disciplinary record, although, as noted, that record is not unblemished and includes a prior (albeit remote) incident involving an altercation with a customer. Nonetheless, the CBA requires that a two-pronged showing be made in order to invoke the exception, with only the first prong being the employee’s disciplinary record. The TA’s position is that the second prong, which allows the arbitrator to set aside the TA’s penalty if it is clearly excessive in light of past precedent in similar cases, has not been met here. Here, the TWU cited no precedent at all. The TA, by contrast, submitted arbitral precedents, some of which purportedly involved dismissals of employees who had engaged in verbal harassment and assault, whose dismissals were upheld through arbitration. The arbitrator distinguished those precedents, but an examination of his decision reveals that he focused largely on issues, such as witness corroboration, that were relevant to the question of whether the underlying charged offenses in fact occurred (in two instances, he described the disciplined employees as “short-term”). However, having found that an assault did occur in this case, that point of distinction was irrelevant. Furthermore, nowhere in the “discussion and analysis” section of his opinion does the arbitrator use the words “clearly excessive” (except in quoting the CBA), or otherwise indicate why the dismissal of a TA conductor who assaulted a customer was a “clear injustice.” Under the circumstances, we conclude that the arbitrator exceeded his authority in reducing the penalty of dismissal, and — 7 — the Supreme Court properly granted the petition to vacate that portion of the award (see CPLR 7511 [b] [1] [iii]; Matter of New York City Tr. Auth. v Transport Workers’ Union of Am., Local 100, AFL-CIO, 6 NY3d 332, 336 [2005]; Matter of New York City Tr. Auth. v Transport Workers’ Union of Am., Local 100, AFL-CIO, 306 AD2d 486, 487 [2003]; Matter of New York City Tr. Auth. v Transport Workers Union of Am., 239 AD2d 421 [1997]). Ill We are aware of the general rules governing review of arbitral decisions, which our dissenting colleagues cite—specifically, those cases which call for deference to the arbitrator even where he or she makes factual errors or misapplies the law in making an award (see e.g. Matter of Silverman [Benmor Coats], 61 NY2d 299, 308-309 [1984]). However, the cases they cite for that proposition are inapposite as they do not involve the CBA provision at issue here. Our conclusion here is supported by our recent decision in Matter of New York City Tr. Auth. v Transport Workers’ Union of Am., Local 100, AFL-CIO (306 AD2d 486 [2003]), which upheld the Supreme Court’s judgment granting a petition seeking vacatur of an arbitration award reducing a penalty under the subject CBA provision. From a review of the record in that case, it appears that Bert Hart, a conductor employed by the TA, inter alia, assaulted a customer on a train. The TA brought charges against him and recommended that he be dismissed; the charges and penalty were sustained through the step process. The matter then was heard before a three-member arbitration board (hereinafter the Board).* A majority of the Board sustained the charges. However, noting that Hart had a good disciplinary record, it reduced the penalty to a time-served suspension. It did not discuss past precedent in similar cases. As relevant here, in its subsequent CPLR article 75 petition seeking vacatur of the penalty imposed by the Board, the TA argued that Hart in fact had a poor disciplinary record, which included a prior charge of being rude to and assaulting a passenger. The TA further argued that given that record, as well as the absence from the arbitration award of references to any evidence that dismissal of Hart was clearly excessive within the meaning of the subject CBA provision, the Board exceeded its power under the subject CBA provision by modifying the — 8 — penalty. The Supreme Court agreed. On the TWU’s appeal, we affirmed. Our dissenting colleagues correctly point out that Matter of New York City Tr. Auth. v Transport Workers’ Union of Am., Local 100, AFL-CIO (306 AD2d 486 [2003] [hereinafter Hart]) is factually distinguishable, but we conclude that the distinctions do not call for a different result on the facts presented in this case, which involves an employee assaulting a customer in defiance of the TA’s Zero Tolerance Policy, and whose record includes a previous incident involving an altercation with a customer. It is true that here, unlike in Hart, the arbitrator discussed past precedent. However, the precedents included cases upholding dismissals of TA employees who had assaulted customers, and in our view do not constitute proof that dismissal of the employee in this case was “clearly excessive.” Hart (as well as previous authority such as Matter of New York City Tr. Auth. v Transport Workers Union of Am. [239 AD2d 421 (1997)]) necessarily decided that the CBA provision at issue here reserves to the courts, on CPLR article 75 review, the authority to determine whether an arbitrator has correctly invoked the “rare[ ]” exception to upholding the TA’s disciplinary action with respect to enumerated conduct. Citing cases decided in other contexts or involving different bargaining agreements, such as Matter of Silverman (Benmor Coats) (61 NY2d 299 [1984] [commercial breach of contract dispute]) and Rochester City School Dist. v Rochester Teachers Assn. (41 NY2d 578 [1977] [school district collective bargaining agreement]), the dissent argues that even if the arbitrator may have violated the CBA’s express limitation that the “clearly excessive” exception be invoked only “rarely,” vacatur would still be improper, and that the remedy for any perceived inconvenience created by the subject provision should be pursued at the bargaining table, rather than in the courts. If that proposition is correct with respect to the CBA provision at issue here, then even factoring in the dissent’s view of its factual differences, Hart was as unwarranted a judicial interference with the arbitral process as this case is, and was not correctly decided. We are not prepared to draw that conclusion. The CBA provision at issue in this case is a carefully crafted direction to the arbitrator that reflects both the TWU’s and the TA’s intent that once an assault charge is sustained, the TA-imposed penalty must be upheld except in rare cases. As a practical matter, the dissent’s view essentially writes that provision out of the CBA. — 9 — IV Accordingly, the judgment is affirmed. Footnotes [*] In December 2002, the TA and TWU agreed to substitute a single, neutral arbitrator for the three-member Board.