Arbitrator Exceeded Power in Nixing Initial Award

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By Jay-Anne Casuga

Oct. 7 — An arbitrator exceeded his power when he issued a substitute award denying a union's grievance over the bumping rights of several laid-off Verizon Florida LLC employees after incorrectly determining that he'd gone beyond his authority in issuing the original award, the U.S. Court of Appeals for the Eleventh Circuit ruled Oct. 7 (Electrical Workers IBEW Local Union 824 v. Verizon Fla., LLC, 11th Cir., No. 15-10536, 10/7/15).

The appeals court affirmed a lower federal court's decision to confirm the original arbitration award in favor of International Brotherhood of Electrical Workers Local 824 and to vacate the substitute award. The arbitrator initially had held that some laid-off employees were entitled under a collective bargaining agreement to “bump” workers with less seniority for certain technician positions because the laid-off employees previously had held those positions.

The arbitrator later decided he lacked the authority to grant such an award because the issue of whether the employees previously held the positions was not properly before him. The Eleventh Circuit concluded that the “previously held” issue was properly before the arbitrator, who was barred from redetermining the merits of decided claims under a common law doctrine that the parties had incorporated into their CBA.

Judge C. Roger Vinson wrote the opinion, joined by Judges Charles R. Wilson and Beverly B. Martin.

Original, Substitute Awards

According to the court, the bargaining agreement between Local 824 and Verizon Florida allowed employees to “bump” workers with less seniority during layoffs if the bumping employee previously held the position sought or if he or she could perform the job with minimum additional training.

Following a September 2012 layoff in which Verizon Florida denied several employees bumping rights into customer zone technician I positions, the union filed a grievance that was submitted to arbitration.

The court said the arbitration proceedings dealt primarily with the “minimum additional training” prong of the CBA's bumping provision. The arbitrator concluded that none of the employees involved in the grievance met that standard.

However, he ultimately sustained the grievance for two employees who had previously held customer zone technician positions.

The union subsequently asked the arbitrator to clarify the award because two other workers satisfied the previously held standard, while Verizon Florida sought reconsideration of the entire award. The company argued that the issue of whether employees previously held the position wasn't properly before the arbitrator, who exceeded his authority in granting the original award.

Agreeing that he exceeded his authority, the arbitrator issued a substitute award denying the union's grievance for all affected employees.

The union sued Verizon Florida in the U.S. District Court for the Middle of Florida to confirm the arbitrator's original award and vacate the substitute award.

The district court ruled in the union's favor, and the company appealed.

Second Award, Not First, Exceeded Authority

Affirming, the Eleventh Circuit held that the arbitrator exceeded his authority with the substitute award, but not his original award.

The court explained that it is generally for the arbitrator to “decide just what the issue was that was submitted to it and argued by the parties.”

Here, it said, the arbitrator initially interpreted the grievance broadly and determined that it implicated the CBA's previously held and minimum additional training provisions. That determination was within the scope of the arbitrator's power, the court said.

Furthermore, the court said Verizon Florida and the union incorporated Rule 40 of the American Arbitration Association's Labor Arbitration Rules into their CBA. Rule 40 codifies the common law doctrine of functus officio, which states that an arbitrator lacks the power to revisit the merits of an award once it has been issued.

As such, the arbitrator in the present case lacked the authority to issue the substitute award.

Court Rejects Verizon Florida's Arguments

Additionally, the Eleventh Circuit rejected Verizon Florida's argument that the arbitrator's original award wasn't final.

It also found no merit to the company's contention that it and the union mutually consented to reconsideration by the arbitrator. The union had sought clarification as to the award's application, while only Verizon Florida sought reconsideration of the entire award, the court said.

Egan, Lev & Siwica represented the union. Thompson Sizemore Gonzalez & Hearing represented Verizon Florida.

To contact the reporter on this story: Jay-Anne Casuga in Washington at jcasuga@bna.com.

To contact the editor responsible for this story: Susan J. McGolrick at smcgolrick@bna.com.