The misperception and ensuing error concerning the presumption of arbitrability in New York public employment.

AuthorRuffo, Philip J.

    The presumption of arbitrability is a judicial construct integral to the grievance-arbitration procedures set forth in the collective bargaining agreement/contract.(1) Its origin is traceable to the historically recognized "Trilogy" cases decided in 1960 by the United States Supreme Court in recognition of the central role held by the grievance-arbitration process effectuating national labor policy.(2) The presumption was thereafter adopted and implemented by the New York Court of Appeals in private sector labor arbitrations and, without exception, by the New York lower and appellate courts in the public sector, extending comparable recognition to the presumption of arbitrability as effectuating New York State labor policy and, thus, furthering the grievance-arbitration process as a method to resolve employee grievance and labor contract disputes.(3)

    In a recently decided consolidation case on April 1, 1999,(4) the Court of Appeals (Court)(5) had occasion to revisit and re-examine its prior 1977 seminal decision of Acting Superintendent of Schools v. United Liverpool Faculty Ass'n (Liverpool).(6) While in the process of revisiting Liverpool, the Court referred to an array of private and public employment sector cases, national and state, concerning the disposition of grievance-arbitration issues, focusing particularly on the presumption of arbitrability.(7) Contrary to the many prior lower and appellate court decisions, Liverpool rejected the arbitrability presumption in New York public employment.(8) The Court concluded that public policy favoring arbitration under the Taylor Law(9) was of recent origin and had not as yet gained the general patina of acceptance that it had in private sector labor or commercial controversies.(10) Liverpool conceded the reality that while the arbitrability presumption was "understandable" in the private sector, in the public sector it "does not advance analysis and indeed in some instances serves rather to obfuscate."(11) Actually, as hereinafter demonstrates, Liverpool was remarkable for the paucity of authoritative sources it relied upon to negate the arbitrability presumption in New York public employment, ignoring authoritative sources to the contrary.(12)

    In Board of Education v. Watertown Education Ass'n (Watertown)(13) the Court, after a "wait-and-see" attitude, involving an interval of some twenty-two years after Liverpool, noted that arbitration in the public sector "is no longer unfamiliar or unaccepted. It is a reality."(14) The Court's reconciliation with the obvious is less than impressive. The reality, it is submitted, evidenced by the multitude of collective bargaining agreements containing grievance-arbitration procedures, took hold some thirty-two years ago with the advent of the Taylor Law.(15) Though it may have escaped the Court's attention, since then it has been a pervasive factor in public sector labor relations.(16) Under the circumstances one is prompted to ask the Court: what took you so long?

    It is further submitted that in Watertown, the Court's adherence to Liverpool's second-step analysis to determine arbitrability, indirectly perpetuates the inarbitrability presumption contrary to the Court's assertion that "an anti-arbitrational presumption is no longer justified either in law, or in the public sector labor environment."(17) The result resonates doubt and confusion as to the Court's actual intent underlying its recent decision regarding the presumption of arbitrability.

    In a supervening respect the Liverpool decision failed, as does the recent Court decision, to fully assess and place in true perspective the clear and unequivocal policy expression of the Legislature in providing a method for the resolution of employee grievances and labor contract disputes.(18) Through Civil Service Law section 200, the Legislature attempted to effectuate some measurable assurance of stability in labor relations in New York public employment.(19) Prior to Liverpool, the presumption of arbitrability was applied without distinction by New York courts in cases addressing the public and private sectors,(20) and was firmly embedded as an integral and inextricable component in determining arbitrability.(21) It is submitted that history, reason, logic, and law amply support the arbitrability presumption in labor arbitration.(22)

    The language employed by the Court in its recent decision, read as a whole, is enigmatic. Hopefully, the occasion will present itself which will enable the Court to clarify, in edifying language, the role of the arbitrability presumption in the grievance-arbitration process in New York public employment, sooner rather than later. Until then, the ghost of Liverpool will continue to remain a haunting specter, influencing the outcome of arbitrability and the arbitration process as a forum to resolve employee grievances and labor contract disputes.

    This Article is limited solely to the issue of the arbitrability presumption. It does not, nor is it intended to, examine or analyze any other aspect of the arbitration process in New York public employment. Part II of this Article will discuss public policy as an essential factor determining the arbitrability of the subject matter sought to be arbitrated.(23) Part III will address whether the subject matter sought to be arbitrated states a claim which, on its face, is covered by the parties agreement to arbitrate;(24) or whether the party seeking arbitration has complied with the agreement's arbitration procedure that is exclusively within the arbitrator's domain.(25)


    The sovereignty doctrine, which forbids in its application to government employment, any dealings between the State and its employees, has roots in English common law.(26) Significantly, in Watertown, the Court spoke of the "sovereign authority" of government--as it was illustrated in Liverpool--as supporting the government's reluctance to delegate its decision-making authority over its employees.(27) The sovereignty doctrine in this context has been eroded in New York.(28)

    Since 1967, the Taylor Law, which requires the State and its political subdivisions to negotiate terms and conditions of employment with representatives of their employees, and to agree upon procedures for the administration of employee grievances, represents a legislatively self-imposed mandate, which clearly and categorically dilutes the core of sovereign authority.(29) The Court in City of Amsterdam v. Helsby.(30) rejected a challenge to the constitutionality of the Taylor Law.(31) The petitioner/plaintiff alleged that the law impermissibly delegated legislative authority to an arbitration panel of ad-hoc non-governmental individuals appointed to resolve bargaining impasses between a public employer and its employees.(32) As a result, the arbitrator's award was, in legal contemplation, held to constitute a final and binding contract upon both the public employer and the union representing its employees.(33)

    Citing an impressive array of cases, Associate Judge Fuchsberg, in a concurring opinion, left no doubt that the legal doctrine of sovereignty was no longer the formidable barrier it once was, precluding arbitration as an appropriate forum to resolve either bargaining impasses or contract disputes.(34) Indeed, arbitration was deemed so preferable a means of settling public sector labor disputes that the Court, reversing the Appellate Division, Second Department, cited with approval the dissenting opinion of Justice Hopkins that "public policy impels its use."(35) Such emphatic language, expressing arbitration as the preferred remedy under a collective bargaining agreement to resolve employee grievance disputes in the public sector, is consistent with the prior view expressed by the United States Supreme Court regarding the grievance-arbitration process in the private sector.(36)

    Thus, by 1969, only two years following the enactment of the Taylor Law,(37) the Supreme Court, Suffolk County, cogently observed that "[c]ertainly, after 1967, not only is the subject type of arbitration permissible, but it was mandated by the public policy of this State."(38)

    On appeal, the Court noted that the challenged grievance-arbitration provision "is a provision commonly found in collective bargaining agreements in the private and public sectors and carries out Federal and State policy favoring arbitration as a means of resolving labor disputes."(39) The Court then proceeded to emphasize that "[i]ndeed, it is the declared policy of this State to encourage `public employers and ... employee organizations to agree upon procedures for resolving disputes' ([sections] 200, subd. [c]). And arbitration is, of course, part and parcel of the administration of grievances."(40)

    Thus, by the year 1977, ten years after the enactment of the Taylor Law, Liverpool was decided and the grievance-arbitration process, as a preferred and favored remedy to resolve employee grievances and labor contract disputes in the New York public employment sector, was jurisprudentially developed, accepted, and firmly imbedded as a matter of State public policy.(41) And, as hereinafter abundantly demonstrates, the presumption of arbitrability was, as in the private sector, metaphorically expressed, joined at the hip with the grievance-arbitration process--that is, until Liverpool.(42)

    Liverpool, in an apparent volte face and illustrative of a judicial retrograde, administered the State's public policy favoring arbitration, a grave setback in an essential aspect--the demise of the presumption of arbitrability.(43) Instead, by compelling inference, the Court of Appeals adopted the converse--the presumption of inarbitrability.(44)

    Liverpool's choice of presumption--inarbitrability over arbitrability--was purposeful, based on scant supportable precedent. It may, in...

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