Dayton, Ohio v. the Fraternal Order of Police, 91-LW-4338

• Decision Date: 10 December 1991
• Docket Number: 91-LW-4338,12793
• Parties: DAYTON, OHIO, Plaintiff-Appellee v. THE FRATERNAL ORDER OF POLICE, Defendant-Appellant CASE C.P. NO. 90-4845
• Court: Ohio Court of Appeals

DAYTON, OHIO, Plaintiff-Appellee v. THE FRATERNAL ORDER OF POLICE Defendant-Appellant C.P. NO. 90-4845

No. 12793

91-LW-4338 (2nd)

Court of Appeals of Ohio, Second District, Montgomery County

December 10, 1991

Mr. J Anthony Sawyer, Director of Law, The City of Dayton, Ohio Kenneth E. Barden, Chief General Counsel, Susan S Silberstein, Chief Administrative Counsel, 101 W. Third Street, P.O. Box 22 Dayton, Ohio 45401, Attorneys for Plaintiff-Appellee.

Sorrell Logothetis, Susan D. Jansen, 111 West First Street, Suite 1100, Dayton, Ohio 45402-1156, Attorneys for Defendant-Appellant.

GRADY J.

The Fraternal Order of Police ("F.O.P.") appeals the judgment of the trial court vacating an arbitrator's award concerning payment of health insurance benefits by the City of Dayton for the benefit of the members of F.O.P., who are employees of the City. The subject of the arbitration, health insurance coverage, is provided in two separate labor agreements with identical terms concerning benefits. The matter submitted for arbitration was an increase in the amount of the maximum, or "cap", amount payable by the City for premiums.

The contracts ran from May and September, 1989 through May and September, 1992. Each provides:

HEALTH CARE COVERAGE RE-OPENER

The health care coverage provisions of this Agreement shall remain in full force and effect until June 1, 1990. Not later than sixty (60) days prior to June 1, 1990, the parties shall re-open for negotiations those provisions of this Agreement relating to the health care coverage.

In the event that the negotiations prior to June 1, 1990, do not result in mutual agreement between the parties on health care coverage for the insurance year June 1, 1991 through May 31, 1992, not later than sixty (60) days prior to June 1, 1991, the parties shall re-open for negotiations those provisions of this Agreement relating to the health care coverage.

The re-opening of the Agreement for health care coverage negotiations shall invoke the dispute settlement procedures set forth in Chapter 4117.14 of the Ohio Revised Code.

The agreement to employ the dispute settlement procedures of R.C. 4117.14 was consistent with Section (E) of that statute, which provides that employees covered by the Public Employees Collective Bargaining Act (R.C. Chp. 4117) may submit "issues in dispute" to a settlement procedure, including the "final offer settlement procedure" of R.C. 4117.14. In that event, however, the procedure must constitute final and binding resolution of the issues in dispute by a neutral third party. O.A.C. 4117-9-03(C).

The parties commenced negotiations on health care coverage provisions in April, 1990. No mutual agreement was reached on the maximum or "cap" amount of the City's share of health insurance premiums or when the new coverage was to commence. The F.O.P. proposed a commencement date of July 1, 1990. The City proposed a commencement date of July 1, 1990 or upon ratification by the F.O.P membership, whichever was later.

Section (C) (3) of R.C. 4117.14 provides that if there is no resolution of the negotiations the matter is submitted to a fact-finder, who "shall make final recommendations as to all the unresolved issues." After due consideration of the respective positions the fact finder recommended a specific, higher "cap" for the City's contribution and that "the effective date for the new rate of contribution under the medical insurance premium cap should be July 1, 1990". The City rejected the fact finder's proposal. The issues were next submitted to the final offer settlement procedure for binding arbitration.

The final offer settlement procedure of R.C. 4117.14 contains thirteen enumerated "guidelines" set out in Section (G) of the statute which provides, inter alia:

The following guidelines apply to final offer settlement proceedings under division (D) (1) of this section:

(1) The parties shall submit to final offer settlement those issues that are subject to collective bargaining as provided by section 4117.08 of the Revised Code and upon which the parties have not reached agreement and other matters mutually agreed to by the public employer and the exclusive representative; except that the conciliator may attempt mediation at any time.

* * *

(11) Increases in rates of compensation and other matters with cost implications awarded by the conciliator may be effective only at the start of the fiscal year next commencing after the date of the final offer settlement award; provided that if a new fiscal year has commenced since the issuance of the board order to submit to a final offer settlement procedure, the awarded increases may be retroactive to the commencement of the new fiscal year. The parties may, at any time, amend or modify a conciliator's award or order by mutual agreement. (Emphasis supplied).

The parties proposed different caps and commencement dates to the "conciliator", who acted as arbitrator. The F.O.P. proposed a commencement date of July 1, 1990. ^[1] The city proposed, for the first time, a commencement date of January l, 1991, the beginning of the next fiscal year.

After a hearing and consideration of the evidence the arbitrator on September 30, 1990, determined that new, higher "caps" for the City's share of premiums would be $116.90 per month for a single employee and $310.60 for family coverage.

The arbitrator also determined that the effective date for the new cap should be July 1, 1990, rather than January 1, 1991, when the City's fiscal year next commenced. The arbitrator acknowledged that the "cap" determination is a matter "'with cost implications awarded by the Conciliator' and as such, the provisions of O.R.C. 4117.14(G) (11) apply." The arbitrator found, however, that the parties intended to waive the "fiscal year" commencement requirement and commence renegotiated changes on July 1, 1990, by virtue of the reopener provision adopting that date for the termination of prior coverage. The report cited "past practice" in which premium contributions commenced at the beginning of the new plan year, on July 1. The arbitrator also noted that the City had not asserted a January 1 commencement date prior to the recommendation of the fact finder, and that

it is simply illogical, harsh, and inconceivable, that the parties would contemplate commencing negotiations for an annual health care benefit in June, yet have the improvement, if any (or diminution) not go into effect until January, some six months later, and at a time when 1/2 of the improvement (or diminution) benefit negotiated would be lost to the bargaining units, or the City, as the case may be. (Report and Recommendation, p. 41).

The City appealed the arbitrator's Report and Award to the common pleas court pursuant to R.C. 2711.10(D), alleging that it is contrary to law and requested, pursuant to R.C. 2711.13, that the order be vacated. The trial court found that any implied intention to adopt July 1, 1990 as a commencement date could not supersede the express intent of the statute and contract to reserve the statutory protections and procedures of R.C. 4117.14(G) (11), limiting commencement of benefits having a cost implication to become "effective only at the start of the fiscal year next commencing." On that basis the trial court vacated the Conciliator's Report in its entirety.

The City of Dayton has, according to its interpretation of the agreement, commenced new insurance plan coverage on July 1, 1990. That new coverage has produced a higher premium cost. Because the arbitrator's award was vacated in its entirety, the City's higher share of the premium cost through new "caps" did not become effective until January 1, 1991. The difference was paid, or payable, by each employee for the six months between July 1, 1990 and January 1, 1991, in an amount determined according to the plan to which the employee subscribed.

The F.O.P. has timely appealed the decision of the trial court and presents two assignments of error:

THE LOWER COURT APPLIED AN IMPROPER STANDARD OF REVIEW TO THE CONCILIATOR'S REPORT AND AWARD.

THE LOWER COURT ERRED IN REVIEWING AND VACATING THE CONCILIATOR'S REPORT AND AWARD.

Because these assigned errors turn on the same issues of fact and law, they will be considered together.

This matter was brought to the common pleas court on the allegation that the arbitrator "exceeded his power" so that "a mutual, final, and definite award upon the subject matter submitted was not made." R.C. 2711.10(D).

Given the presumed validity of an arbitrator's award, a reviewing court's inquiry into whether he exceeded his authority is limited, and once it is determined that the arbitrator's award draws its essence from the collective bargaining agreement and is not unlawful, arbitrary, or capricious, a reviewing court's inquiry under R.C. 2711.10(D) is concluded. Findlay City School Dist. Bd. of Edn. v. Findlay Edn. Assn. (1990), 49 Ohio St. 3d 129.

When a provision in a collective bargaining agreement is subject to more than one reasonable interpretation and the parties to the contract have agreed to submit their contract interpretation disputes to final and binding arbitration, the arbitrator's interpretation of the contract, and not the interpretation of a reviewing court, governs the rights of the parties thereto.

City of Hillsboro v. Fraternal Order of Police (1990), 52 Ohio St. 3d 174, Syllabus by the Court. "Hence, judicial inquiry for purposes of vacating an arbitrator's award is limited by Findlay, and where a reviewing court exceeds the permissible scope of review such judgment will be reversed." Id., at 176.

Our review of this matter is confined to an evaluation of the order issued by the court of common pleas pursuant to R.C 2711.10. We also may not pass on...