In re the Arbitration between Board of Education & McGinnis

100 A.D.2d 330, 475 N.Y.S.2d 512, 1984 N.Y. App. Div. LEXIS 17010
CourtAppellate Division of the Supreme Court of the State of New York
DecidedApril 12, 1984
StatusPublished
Cited by9 cases

This text of 100 A.D.2d 330 (In re the Arbitration between Board of Education & McGinnis) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re the Arbitration between Board of Education & McGinnis, 100 A.D.2d 330, 475 N.Y.S.2d 512, 1984 N.Y. App. Div. LEXIS 17010 (N.Y. Ct. App. 1984).

Opinion

OPINION OF THE COURT

Levine, J.

This case concerns the collective bargaining agreement entered into by the Hunter-Tannersville Teachers’ Association (association), which is the bargaining representative [331]*331for the teachers involved herein, and the Hunter-Tannersville Central School District (district). The agreement was initially effective from July 1, 1978 through June 30, 1981. It provided (article V) for health insurance coverage under the New York State employees’ health plan, with specific employer percentage contributions toward premiums. It also provided (article XII) for a grievance/arbitration procedure to resolve disputes over claimed violations of the agreement or “with respect to its meaning or application”. On September 16, 1981, the parties executed a “Memorandum of Agreement” which extended the effect of the original agreement through June 30, 1984, including the provision for arbitration. The 1981 memorandum also expressly provided that the health insurance coverage for the members of the association specified under the original agreement would be continued, but that the “Association and the Superintendent of Schools * * * shall meet to examine insurance coverage offered by other companies” or, as an alternative, “a self insurance program”.

On January 10, 1983, the district filed an improper practice charge with the Public Employment Relations Board (PERB), charging that the association had violated section 209-a (subd 2, par [b]) of the Civil Service Law and the 1981 memorandum of agreement by failing to negotiate in good faith concerning the health insurance carrier to be selected for the remainder of the contract term. While this matter was pending on appeal, PERB overruled a decision of a hearing officer and determined that it would accept jurisdiction over the charge because the provision of the parties’ memorandum of agreement requiring them to meet and confer on health insurance unambiguously constituted a reopener clause, imposing on each party a duty to negotiate in good faith on that subject. PERB’s decision states that its interpretation of the clause was based upon the parties’ concession as well as the language used. PERB, therefore, remanded the matter for a hearing on whether the association had so failed to negotiate.

On January 12, 1983, the association submitted a grievance pursuant to the grievance procedure contained in the collective bargaining agreement, alleging that the district had breached the agreement by unilaterally changing [332]*332health insurance coverage from the State-wide plan provided for under the agreement to a self-funding program. After the preliminary steps of the grievance procedure failed to resolve this dispute, the association filed a demand for arbitration on January 24, 1983.

The district then brought the instant proceeding for a permanent, or, in the alternative, a temporary stay of the arbitration pending PERB’s determination. Special Term denied the district’s application for a stay. This appeal ensued.

The main thrust of the district’s appeal is that a stay of arbitration is mandated here because public policy prohibits the submission to arbitration of the issue of whether it breached the collective bargaining agreement by unilaterally changing its employees’ health insurance program. The district’s reasoning is as follows: under the memorandum of agreement of September 16, 1981, the parties each promised (1) that the existing health insurance program would continue, but that (2) they would confer and negotiate toward finding a mutually agreeable alternative program. Since, concededly, the district unilaterally discontinued the prior coverage, the real question before the arbitrator was whether the district’s obligation under the first promise was discharged by the association’s breach of the promise to negotiate on a substitute program. However, this is the very same issue now pending before PERB, i.e., whether the association failed to negotiate in good faith as statutorily required by reason of the reopener clause. Permitting the arbitrator to decide this issue, the district argues, impermissibly impinges upon the exclusive jurisdiction of PERB over improper labor practice charges and creates potential conflict between the findings, conclusions arid remedies determined by the arbitrator and those determined by PERB.

Undoubtedly, as the district has demonstrated, the issues pending before the arbitrator bear a relationship to the matter to be decided by PERB. Nevertheless, we have concluded that neither the overlap nor the potential for conflict is so great that, under the controlling precedent, judicial interference is required in advance of the arbitration process.

[333]*333We deal again here with the scope of a judicially created doctrine for staying arbitration or vacating awards on nonstatutory grounds of public policy. Two related rationales have been invoked to justify its application. The first is derived from the same source in public policy that renders certain agreements illegal and hence unenforceable. Because public policy prevents parties from directly contracting away certain rights or responsibilities, the law will not permit them to achieve the same result indirectly by agreeing to abide by an arbitrator’s award which will similarly dissipate those rights or responsibilities. Thus, where by statute boards of education are given the nondelegable right and responsibility to make decisions on teacher qualifications and tenure, such boards may neither contract away their authority directly nor agree to arbitrate limits on such authority (Board of Educ. v Areman, 41 NY2d 527, 532-534; Matter of Cohoes City School Dist. v Cohoes Teachers Assn., 40 NY2d 774, 776-777). By the same token, it has also been held that when a contractual dispute centers on a matter of important governmental policy or State interest, only a legally constituted tribunal and not an arbitrator may entertain jurisdiction over the controversy, since the informal, rule-free, virtually unreviewable arbitration process does not insure that contractual rights and responsibilities affected by the public interest will not be weakened or ignored (see, e.g., Matter of Wertheim & Co. v Halpert, 48 NY2d 681 [claim of discriminatory discharge in violation of civil rights laws]; Matter of Aimcee Wholesale Corp. [Tomar Prods.], 21 NY2d 621 [dispute over antitrust violations]; Schneider v Schneider, 17 NY2d 123 [child custody contests]).

The public policy doctrine has been sparingly applied to stay arbitration or vacate awards, however, because of the countervailing policy in favor of arbitration as an expeditious and economical alternative method of resolving legal disputes. Before courts may intervene in the name of the doctrine, the public policy at issue must be “a strong one, amounting to gross illegality or its equivalent”, generally to be found in a “readily identifiable source in the statutes or common-law principles” (Matter of Port Washington Union Free School Dist. v Port Washington Teachers Assn., [334]*33445 NY2d 411, 422 [Breitel, Ch. J., concurring]). The conflict also has to be clear cut. The public policy barring arbitration must: “prohibit, in an absolute sense, particular matters being decided or certain relief being granted by an arbitrator. Stated another way, the courts must be able to examine an arbitration agreement or an award on its face, without engaging in extended factfinding or legal analysis, and conclude that public policy precludes its enforcement”

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Bluebook (online)
100 A.D.2d 330, 475 N.Y.S.2d 512, 1984 N.Y. App. Div. LEXIS 17010, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-the-arbitration-between-board-of-education-mcginnis-nyappdiv-1984.