Chapter 22 - § 22.2 • ADR IN DISPUTES WITH THE STATE OF COLORADO, ITS AGENCIES, AND ITS POLITICAL SUBDIVISIONS

• Jurisdiction: Colorado

§ 22.2 • ADR IN DISPUTES WITH THE STATE OF COLORADO, ITS AGENCIES, AND ITS POLITICAL SUBDIVISIONS

Colorado has an extensive system of political subdivisions below the state level, each subdivision being governed by specific provisions of the state constitution, state statutes, and their own charters and ordinances. Thus, the "rules" as to involvement in ADR may differ from one subdivision to th next, but, in general, are similar.

§ 22.2.1—Power Of State Governmental Entities To Submit Disputes To Binding Arbitration

Fraternal Order of Police, Colorado Lodge No. 19 v. City of Commerce City¹ is the leading case on the power of governmental entities to submit issues to arbitration. The district court held that a binding arbitration provision in the city charter relating to police collective-bargaining issues was unconstitutional and unenforceable. On appeal, the Colorado Supreme Court reversed.

The city charter required that the city council create and maintain a panel of arbitrators from the applicants meeting the defined qualifications. When the employee union and the city were unable to agree upon a contract, the union and the city engaged in a process whereby each party alternatively eliminated one name from the panel, until either one or two names remained. If one name remained, that person became the arbitrator. If two names remained, the mayor selected one to be the arbitrator. Alternatively, the union and the city could simply agree upon an arbitrator from the panel. The arbitrator was required to choose either the final offer of the union or the final offer of the city on each issue. Judicial review was limited to affirming the award, unless:

• The award was procured by corruption, fraud, or other undue means;
• The decision on any issue was arbitrary and capricious, i.e., there was no competent evidence in the record to support the decision; or
• The decision on any issue was reached without considering certain factors defined in the charter.

The Colorado Supreme Court held that the city charter provided the arbitrator with the political accountability required by Article XXI, § 4 of the Colorado Constitution.

The court began with a review of the prohibition against the delegation of legislative power drawn from Article XXI, § 4 of the Colorado Constitution. This section mandates that every person having authority to exercise a governmental power must either be an elected officer, or be appointed or designated in accordance with the law by an elected officer.

The court began its analysis with Greeley Police Union v. City Council of Greeley,² in which the Colorado Supreme Court held that a binding arbitration provision in the Greeley charter violated the Colorado Constitution, specifically Article XXI, § 4, "Prohibitive Delegation of Legislative Power to Politically Unaccountable Persons." The Greeley charter provided for the American Arbitration Association (AAA), "an independent organization with no political accountability," to submit a list of five potential arbitrators. Each party had the right to eliminate two names and to list the remaining three in order of preference. The AAA would then select the arbitrator. The court held that the binding arbitration provision violated Article XXI, § 4 and Article V, § 35 of the Colorado Constitution, which prohibit delegation of legislative power to politically unaccountable persons.

That principle of non-delegation was reaffirmed in City of Aurora v. Aurora Firefighters' Protective Association.³ As in Greeley, the charter provisions provided that the American Arbitration Association, an independent organization with no political accountability, submit a list of seven names of potential arbitrators to each party, and the parties were then to cross off two names from the list...