12.18 - D. Noncompliance With Valid Agreement

• Jurisdiction: New York

d. Noncompliance With Valid Agreement

The second statutory basis upon which a stay of arbitration may be granted is that “a valid agreement . . . has not been complied with.”⁵⁵⁷⁷ This ground is often relied upon, albeit unsuccessfully, to seek a stay where the employer believes the union has not complied with the time or other requirements for properly demanding arbitration. In these cases, the employer’s argument raises issues of procedural arbitrability that must be decided by the arbitrator.⁵⁵⁷⁸ Judicial deferral to arbitration under a broad arbitration clause has led to denial of a stay where an employer has alleged that the grievance is premature,⁵⁵⁷⁹ that a prior arbitration award bars the submission of a similar issue⁵⁵⁸⁰ and that the individual grievant, on whose behalf a grievance was filed, was not within the bargaining unit covered by the contract, as well as a failure to meet conditions precedent.⁵⁵⁸¹

Parties are free to agree to certain steps as a condition precedent to arbitration. In this case, if the court determines that the condition precedent was not complied with, it may be relied upon to obtain a stay of arbitration.⁵⁵⁸² A party relying on the provision must demonstrate that the agreement creates a condition precedent, as opposed to a procedural guideline. The courts have been reluctant to find a condition precedent unless the contract uses those precise words.⁵⁵⁸³

The Court of Appeals has ruled that, for example, whether a party has complied with the step-by-step grievance process is a question well within an arbitrator’s province when the collective bargaining agreement lacks a provision expressly making compliance with the procedures a condition precedent to arbitration.⁵⁵⁸⁴ Accordingly, where a collective bargaining agreement contained a broad arbitration clause and did not expressly identify any conditions precedent to arbitration, the alleged failure of an employer to hold a step two hearing did not prevent the grievance from going straight to arbitration.⁵⁵⁸⁵

A stay for failing to comply with time constraints will not be granted when the parties have failed to make the grievance process’s time constraints a condition precedent to arbitration.⁵⁵⁸⁶ Even where a collective bargaining agreement contains a provision stating that time limits are of the essence and that failure to follow them will result in a termination of the grievance, the contract will not be said to expressly condition access to arbitration upon compliance with these step-by-step procedures.⁵⁵⁸⁷

In at least two cases, however, appellate courts have granted an employer’s application for a stay of arbitration upon finding that the union had not complied with certain time limitations set forth in the grievance and the collective bargaining agreement’s arbitration clause.⁵⁵⁸⁸ In one of these cases, the court found that, even if the time...