City of New Britain v. AFSCME

Decision Date01 May 2012
Docket NumberNo. 18671.,18671.
CourtConnecticut Supreme Court
PartiesCITY OF NEW BRITAIN v. AFSCME, COUNCIL 4, LOCAL 1186.

OPINION TEXT STARTS HERE

Mary C. Pokorski, associate city attorney, for the appellant (plaintiff).

J. William Gagne, Jr., West Hartford, with whom, on the brief, was Kimberly A. Cuneo, for the appellee (defendant).

ROGERS, C.J., and NORCOTT, PALMER, ZARELLA, McLACHLAN and HARPER, Js.

ROGERS, C.J.

The issue in this certified appeal 1 is whether the plaintiff, the city of New Britain, agreed to arbitrate a dispute with certain city employees, classified as foremen, regarding an alleged violation of the city's civil service rules. The plaintiff appeals from the judgment of the Appellate Court affirming the trial court's denial of its application to vacate the arbitration award in favor of the defendant, AFSCME, Council 4, Local 1186. 2New Britain v. AFSCME, Council 4, Local 1186, 121 Conn.App. 564, 570, 997 A.2d 560 (2010). The plaintiff claims that the Appellate Court improperly concluded that it agreed to arbitrate the foremen's dispute in a settlement agreement between the parties. Id. We agree with the plaintiff that it never agreed to arbitrate the matter and, accordingly, we reverse the judgment of the Appellate Court.

The following facts are undisputed. The plaintiff and the defendant negotiated a collective bargaining agreement, effective July 1, 2003, to June 30, 2008. Article XIV, § 11.5, of the collective bargaining agreement provides: “The collective bargaining process will be the sole means for submitting requests for upgrading and/ or title changes.” Article XIV, § 14.9(F), of the collective bargaining agreement provides: “Effective [July 1, 2005] the parties agree that arbitration shall be used to redress all upgrades that have not been resolved in negotiations.”

In January, 2006, the plaintiff and the defendant negotiated a number of upgrades that increased the pay of certain city employees. New Britain v. AFSCME, Council 4, Local 1186, supra, 121 Conn.App. at 566, 997 A.2d 560. The foremen did not receive upgrades during these negotiations, but the subordinate employees whom they supervise did.3 To memorialize their agreement, the parties signed a memorandum of understanding, which provided in relevant part: “The parties hereby mutually agree that the list of proposed upgrades on the attached pages (dated [January 18, 2006] ) would go into effect retroactive to January 1, 2006. Any omissions, adjustments, corrections, etc. can only be made with the signature of both parties. The parties agree that arbitration shall NOT be used to redress all upgrades that have not been resolved in the negotiations.” (Internal quotation marks omitted.) Id., at 567, 997 A.2d 560.

Thereafter, it was discovered that, as a result of these upgrades, the foremen were paid at a rate less than 5 percent above the rate paid to the subordinates, in violation of the rules of the city's civil service commission. The civil service rule at issue provides that persons classified as foremen shall be paid at least 5 percent more than the employees whom they supervise. The foremen, as a class, filed an unfair labor practice complaint regarding the violation of the civil service rules. The defendant, on behalf of the foremen, then entered into a settlement agreement with the plaintiff on September 8, 2006. That settlement agreement provided: [The plaintiff] hereby agrees that [the defendant] may file a grievance regarding the issue of [f]oremen being paid less than 5 [percent] more than their subordinates. This grievance shall be filed directly to arbitration. [The plaintiff] and [the defendant] further agree that either party may raise any claim or defense they could otherwise have made had they filed at step [one], including the issue of arbitrability but not including timeliness. In consideration of the above, [the defendant] agrees to the withdrawal and closing of [the unfair labor practice action].”

The matter was thereafter submitted to arbitration in two phases. In the first submission to the state board of mediation and arbitration (board), the plaintiff argued that the matter was not arbitrable at all. New Britain v. AFSCME, Council 4, Local 1186, supra, 121 Conn.App. at 566–67, 997 A.2d 560. In support of its claim, the plaintiff referred the arbitrators to the arbitration provision in the memorandum of understanding. Id. Specifically, the plaintiff claimed that it never agreed to arbitration because the memorandum of understanding specifically prohibited arbitration regarding upgrades not resolved therein, and the settlement agreement specifically reserved the plaintiff's right to raise the defense of arbitrability.

The board issued an award concluding that the matter was arbitrable. While recognizing that no foremen positions were at issue in the upgrades that had been negotiated for subordinates, the board concluded that it was “very questionable whether the prohibition against the use of arbitration [in the memorandum of understanding] was meant to concern the unforeseen consequences of an automatic upgrade to the foremen through reliance on the [c]ivil [s]ervice [r]ules.” The board also concluded, in light of the settlement agreement, that it would be unreasonable to conclude that the matter was not arbitrable.

The parties then moved to the second phase of the arbitration. After hearing evidence, the board determined that the civil service rule mandating a 5 percent pay differential for supervisors applied in the present case. New Britain v. AFSCME, Council 4, Local 1186, supra, 121 Conn.App. at 567–68, 997 A.2d 560. The board further determined that the civil service rule did not conflict with the provisions of the parties' collective bargaining agreement. Id., at 568, 997 A.2d 560. The board thus concluded in the defendant's favor that the parties intended to incorporate the language of the civil service rules into their collective bargaining agreement, and that the two provisions should therefore be read and applied in concert. Id.

On February 29, 2008, the plaintiff filed an application to vacate the arbitration award pursuant to General Statutes § 52–418(a)(4),4 claiming that the arbitrators improperlyconcluded that the dispute was subject to arbitration and, on the merits, that the foremen were entitled to be paid a rate 5 percent above the employees they supervise. The trial court denied the application, concluding that it was not empowered to overturn the arbitrators' decisions, even if their interpretation of the parties' agreements was wrong.

The plaintiff appealed to the Appellate Court, which, applying the positive assurance test,5 concluded that “eight months after agreeing that arbitration should not be used to redress the upgrades, [the plaintiff] agreed to arbitrate the foremen's grievance as part of its settlement agreement with the defendant.” Id., at 570, 997 A.2d 560. Thus, because the Appellate Court concluded that it could not state “with positive assurance that the parties intended to exclude the issue from arbitration,” it affirmed the judgment of the trial court. Id. This appeal followed.

The plaintiff claims that the Appellate Court improperly affirmed the trial court's denial of its motion to vacate. First, the plaintiff claims that collective bargaining negotiations were a condition precedent to arbitration under the collective bargaining agreement and the memorandum of understanding, and that the mandatory negotiations did not take place. Second, the plaintiff asserts that the memorandum of understanding clearly evidenced the parties' intent not to arbitrate this dispute and the settlement agreement merely allowed the defendant to file a grievance in arbitration while specifically reserving the plaintiff's right to raise nonarbitrability as a defense. The defendant, on the other hand, claims that the condition precedent was satisfied when the parties negotiated the upgrades set forth in the memorandum of understanding, and, regardless, the plaintiff subsequently agreed to arbitrate the pay differential dispute in the subsequent settlement agreement.6 For the reasons we set forth in the following discussion, we agree with the plaintiff that the foremen's dispute was not arbitrable and, accordingly, reverse the judgment of the Appellate Court.

We first determine our standard of review. In doing so, we note that both parties assert in their briefs that our standard of review in this case is limited. Indeed, when reviewing a denial of a motion to vacate under § 52–418(a)(4), we generally reverse a decision upholding the denial only if we conclude that the arbitrator acted in manifest disregard of the law.7 Because, however, the plaintiff appeals from the arbitrators' determination that the dispute was arbitrable, rather than from the award itself, we must examine more closely the question of our standard of review.

[A party] can be compelled to arbitrate a dispute only if, to the extent that, and in the manner which, [it] has agreed so to do.... Because arbitration is based on a contractual relationship, a party who has not consented cannot be forced to arbitrate a dispute.” (Citation omitted; internal quotation marks omitted.) MBNA America Bank, N.A. v. Boata, 283 Conn. 381, 386, 926 A.2d 1035 (2007). We recently noted that three distinct issues arise in cases such as the present one: (1) whether the parties agreed to arbitrate the underlying merits of the case, i.e., whether the matter is arbitrable; (2) who has the primary authority to decide that question—the arbitrator or the court; and (3) if the court has the primary authority to decide that question, whether the parties engaged in conduct that precludes judicial review of the arbitrator's decision on that matter. 8Bacon Construction Co. v. Dept. of Public Works, 294 Conn. 695, 709–10, 987 A.2d 348 (2010).

In accordance with these principles, in determining our standard of...

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