Justia Arbitration & Mediation Opinion Summaries

Michael Nadeau, an employee with the Bureau of Insurance, married a manager of a Bureau-regulated entity. The Bureau subsequently discharged Nadeau on the basis that his continued employment at the Bureau while married to a manager of a Bureau-regulated entity violated Me. Rev. Stat. 24, 209(1). Nadeau initiated the grievance process manadated by the collective bargaining agreement (CBA). After an arbitration hearing, the arbitrator concluded that the Bureau violated the CBA by discharging Nadeau without just cause and ordered his reinstatement. The Bureau petitioned the superior court seeking to vacate the arbitration award, contending that the award of reinstatement required the Bureau to violate section 209(1), which prohibits the Bureau from employing persons "connected with the management" of Bureau-regulated entities. The superior court reported the case to the Supreme Court. The Court declined to answer the reported question regarding the interpretation of section 209 after finding that the arbitration award did not violate public policy, the arbitrator did not exceed his powers, and the award was not subject to further judicial scrutiny on that basis. Remanded for entry of a judgment confirming the arbitration award. View "Dep't of Prof'l & Fin. Regulation v. State Employees Ass'n" on Justia Law

In 2002, county voters adopted an amendment to the county charter relating to the resolution by binding arbitration of collective bargaining impasses with the county's law enforcement employees and uniformed firefighters. In 2003, the county council adopted an ordinance implementing that charter provision. In 2011, the county council amended the 2003 ordinance to provide that binding arbitration did not require the council to appropriate funds or enact legislation necessary to implement a final written award in arbitration. An uncodified section of the 2011 council bill also provided that, if any part of the 2011 ordinance were held invalid, the entire county code section enacted by the 2003 ordinance, as amended through the 2011 ordinance, would be deemed repealed by operation of law, with the result that impasses would be addressed by a code section that did not authorize binding arbitration. Petitioners sought a declaratory judgment that the 2011 ordinance violated the 2002 charter amendment. The circuit court held the 2002 charter amendment violated the Maryland Constitution. The Supreme Court reversed, holding (1) the 2002 charter amendment bound the county council; and (2) portions of the 2011 ordinance, as well as its uncodified section 3, violated the charter and were invalid. Remanded. View "Atkinson v. Anne Arundel County" on Justia Law

The Fraternal Order of Police, Montgomery County Lodge 35, Inc. (FOP) filed a grievance under its collective bargaining agreement (CBA) with Montgomery County following the County's unilateral decision to discontinue a long-standing practice of allowing shop stewards to sit in on disciplinary interrogations for training purposes. The County filed a motion to dismiss the grievance, arguing that arbitration of the issue was preempted by the Law Enforcement Officers' Bill of Rights (LEOBR). The arbitrator determined the grievance was not preempted and denied the motion to dismiss. Subsequently, the County filed a petition to vacate the arbitration award in the circuit court. The circuit court affirmed the arbitrator's decision and granted summary judgment on behalf of the FOP. The Court of Appeals affirmed, holding that the LEOBR was not implicated by the steward training grievance and, therefore, did not preempt its arbitration under the CBA. View "Montgomery Co. v. FOP Lodge 35" on Justia Law

Brentwood Homes, Inc. and the other appellants in this case (collectively "Brentwood Homes") appealed a circuit court's order denying a motion to stay the proceedings and compel arbitration in a lawsuit filed by Petitioner Fred Bradley that arose out of his purchase of a home in South Carolina. Although Brentwood Homes conceded the Home Purchase Agreement did not meet the technical requirements of the South Carolina Uniform Arbitration Act (the "UAA"), it claimed the court erred in denying the motion because the transaction involved interstate commerce and thus was subject to the Federal Arbitration Act ("FAA"). Upon review, the Supreme Court concluded that because the essential character of the Agreement was strictly for the purchase of a completed residential dwelling and not the construction, the Court found the FAA did not apply. Furthermore, the existence of the national warranty and Bradley's use of out-of-state financing did not negate the intrastate nature of the transaction. Accordingly, the Court affirmed the circuit court's order denying Brentwood Homes' motion to stay the proceedings and compel arbitration as Brentwood Homes failed to offer sufficient evidence that the transaction involved interstate commerce to subject the Agreement to the FAA. View "Bradley v. Brentwood Homes" on Justia Law

The Cumberland Teachers Association (union), appealed to the Supreme Court that confirmed an arbitrator's award in favor of the Cumberland School Committee (school committee). After protracted contract negotiations, the school committee and the union agreed on a three-year collective bargaining agreement (CBA) that would govern their relations for the 2006-2007, 2007-2008 and 2008-2009 academic years. "However, the parties soon discovered that they had left the negotiating table with two very different understandings of how a key component of their agreement would be implemented." An arbitrator was selected and the parties agreed that the issue to be decided by the arbitrator was whether “the Cumberland School Committee place[d] the aggrieved teachers at the correct salary level for the 2007-08 school year?” On appeal to the Supreme Court, the union argued that the arbitrator manifestly disregarded a contract provision when he found that there was no written agreement about how the new salary schedule would be implemented for the 2007-2008 year. Upon review, the Supreme Court concluded that the union did not demonstrate that the arbitrator manifestly disregarded the contract or that he was completely irrational in arriving at his decision and award. View "Cumberland Teachers Association v. Cumberland School Committee" on Justia Law

At issue in this certified appeal was whether Plaintiff, the city of New Britain, agreed to arbitrate a dispute with certain city employees, classified as foremen, regarding an alleged violation of the city's civil service rules. The trial court denied Plaintiff's application to vacate the arbitration award in favor of Defendant, AFSCME, Council 4, Local 1186. The appellate court affirmed. The Supreme Court reversed, holding that the appellate court improperly concluded that Plaintiff agreed to arbitrate the foremen's dispute in a settlement agreement between the parties. Because Plaintiff did not agree to arbitrate the dispute, it could not be compelled to submit to arbitration. Remanded with direction to grant Plaintiff's application to vacate the arbitration award. View "City of New Britain v. AFSCME, Council 4, Local 1186" on Justia Law

This case involved the Randolph-Sheppard Vending Stand Act, 20 U.S.C. 107, which established a cooperative program between the federal government and the states to assist blind persons who wish to operate vending facilities on federal property. The California Department of Rehabilitation (DOR) and the U.S. Department of Education appealed from the district court's decision enforcing a 2008 arbitration award issued pursuant section 107d-1(a) of the Act. At issue was whether the 2008 arbitration panel exceeded its authority under the Act when it ruled that DOR had a statutory obligation to sue the General Services Administration (GSA) for its failure to comply with the 2000 Arbitration Award, and therefore was liable for damages in favor of a blind vendor when it failed to do so. Based on the plain language of the Act and other guides to statutory construction, the court concluded that the Act did not impose a statutory obligation on a state licensing agency to sue a federal agency for its failure to comply with a Randolph-Sheppard arbitration award. The 2008 arbitration panel therefore committed a legal error when it interpreted the Act as requiring DOR to bring an action against GSA, and that DOR's failure to do so made it liable for compensatory damages. Because DOR had no statutory obligation to sue GSA to enforce the 2000 Arbitration Award, the 2008 arbitration panel's ruling that DOR became liable for the damages against GSA by failing to bring such an enforcement action was "not in accordance with law" and must be set aside. View "Sauer v. U.S. Dept. of Education, etc." on Justia Law

Consolidating several appeals, the Supreme Court addressed the effect of a municipality's financial distress and recovery planning on an arbitration award agreed to pursuant to the Policemen and Firemen Collective Bargaining Act (Act). For approximately twenty years, the City of Scranton has been designated a distressed municipality under the Municipalities Financial Recovery Act. Pursuant to the Recovery Act, the City has its Commonwealth-mandated financial advisors who assist in creating a financial recovery plan (essentially a budget). In the most recent collective bargaining agreements between the City of Scranton and its Police and Firefighter Unions expired at the close of 2002. Negotiations as to future terms and work conditions for union members resulted in impasses. Accordingly, pursuant to the Act, arbitrators were selected to establish appropriate terms and conditions. Throughout the arbitrations, the City maintained that the arbitrators lacked legal authority to award relief impinging on the City's financial recovery plan. The City attempted to resist paying the ensuing award that resulted from the arbitration. The Commonwealth Court found that it was required to vacate the awards, holding that they did not conform to the City's Recovery Plan and would result in increased financial and operational burdens on an already distressed municipality. The Unions appealed to the Supreme Court. The Court focused on the distinction between the terms "arbitration award" and "arbitration settlement": the City argued that it was not mandated to pay "awards" but "settlements." The Supreme Court found the term "settlement" ambiguous, and the plain meaning could include the "award" given by the arbitrators in this case. Accordingly, the Court reversed the Commonwealth Court's order that the award negatively impacted the City's Recovery Plan. View "City of Scranton v. Firefighters Local Union" on Justia Law

Plaintiff brought suit against the Dealership and Porsche when the pre-owned car that she purchased from the Dealership developed serious mechanical problems during the warranty period and the Dealership refused to honor her warranty claims. Plaintiff alleged breach of implied and express warranties under the Magnuson-Moss Warranty Act (MMWA), 15 U.S.C. 2301 et seq., and breach of contract and unconscionability under California law. The district court granted the Dealership's petition to compel arbitration pursuant to the mandatory arbitration provision in the sales contract that plaintiff signed when she bought the car and stayed the action against Porsche. Plaintiff's principal argument on appeal was that the MMWA barred the provision mandating pre-dispute binding arbitration of her warranty claims against the Dealership. Although the text of the MMWA did not specifically address the validity of pre-dispute mandatory binding arbitration, Congress expressly delegated rulemaking authority under the statue to the Federal Trade Commission (FTC). The FTC construed the MMWA as barring pre-dispute mandatory binding arbitration provisions covering written warranty agreements and issued a rule prohibiting judicial enforcement of such provisions with respect to consumer claims brought under the MMWA. Because it was required to defer to the reasonable construction of a statute by the agency that Congress had authorized to interpret it, the court held that the MMWA precluded enforcement of pre-dispute agreements such as Porsche's that required mandatory binding arbitration of consumer warranty claims. The court declined to address plaintiff's remaining claims. Accordingly, the court reversed and remanded for further proceedings. View "Kolev v. Euromotors West/The Auto Gallery, et al." on Justia Law

An Alaska state trooper was terminated in part due to dishonesty. The Public Safety Employees Association (PSEA) filed a grievance on behalf of the discharged trooper and then invoked arbitration. An arbitrator reinstated the trooper, ruling that the State did not have cause to terminate him. The superior court upheld the arbitrator's ruling. The State appealed to the Supreme Court, arguing that the arbitrator committed gross error and that the reinstatement of the trooper was unenforceable. Upon review of the arbitrator's decision and subsequent superior court ruling, the Supreme Court held that the arbitrator's award in this case was not enforceable as a violation of public policy: "the State should be free to heighten its enforcement of ethical standards. . . We are [. . . ] troubled by the arbitrator's suggestion that the State's past lenience toward minor dishonesty requires it to be permanently lenient." Because the arbitrator's award was neither unenforceable nor grossly erroneous, the Court affirmed the superior court and the arbitration decision. View "Alaska v. Public Safety Employees Association" on Justia Law