Mich. AFSCME Council 25 & Affiliated Local 101 v. Cnty. of Wayne
| Decision Date | 21 April 2022 |
| Docket Number | 356322,356320 |
| Parties | MICHIGAN AFSCME COUNCIL 25 and AFFILIATED LOCAL 101, Plaintiffs-Appellants, v. COUNTY OF WAYNE, Defendant/Third-Party Plaintiff-Appellee, And VICTOR PLESA, Third-Party Defendant. MICHIGAN AFSCME COUNCIL 25 and AFFILIATED LOCAL 101, Plaintiffs, v. COUNTY OF WAYNE, Defendant/Third-Party Plaintiff-Appellee, And VICTOR PLESA, Third-Party Defendant-Appellant. |
| Court | Court of Appeal of Michigan — District of US |
UNPUBLISHED
Wayne Circuit Court LC No. 20-007378-CL
Before: Jansen, P.J., and Sawyer and Riordan, JJ.
In these consolidated appeals, plaintiffs Michigan AFSCME Council 25 and Affiliated Local 101 appeal as of right in Docket No. 356320, and third-party defendant Victor Plesa appeals as of right in Docket No. 356322, all challenging the trial court's order denying plaintiffs' and Plesa's motions for summary disposition to confirm an arbitrator's awards, granting summary disposition in favor of defendant and third-party plaintiff Wayne County pursuant to MCR 2.116(I)(2), and vacating an arbitrator's awards in favor of Plesa on the ground that the arbitrator exceeded his authority in issuing the awards. We affirm.
Plesa applied for retirement while awaiting the outcome of a disciplinary action initiated by defendant arising from a work accident that resulted in an injury to another worker. His retirement application required him to assent to a "separation waiver," which stated that he was terminating his employment and not seeking reemployment. Defendant terminated his employment the following day. Plesa allowed his retirement application to proceed, but he also filed a grievance pursuant to a collective-bargaining agreement (CBA) with defendant, seeking reinstatement of his employment. In the meantime, the Wayne County Employees' Retirement System ("WCERS") approved Plesa's retirement. Plesa thereafter transferred his defined contribution retirement account funds to an individual retirement account.
Plesa's grievance proceeded to arbitration. Defendant argued that Plesa could not be reinstated because he represented in the separation waiver that he was terminating his employment and not seeking reemployment. Defendant argued that if Plesa was reinstated after he withdrew his retirement account funds his employment would violate defendant's retirement ordinance and the Internal Revenue Code (IRC), which prohibit actively employed persons from receiving retirement benefits. Defendant believed that WCERS and its members could be subject to adverse tax consequences as a result of these violations. The arbitrator found that defendant violated the CBA's just-cause termination provision when it terminated Plesa's employment, and that suspension, not termination was the appropriate disciplinary action. The arbitrator disagreed with defendant's argument that Plesa's retirement application precluded his reinstatement. Accordingly, the arbitrator issued an award that reduced Plesa's discipline from termination to suspension, reinstated Plesa's employment, and required defendant to pay him backpay. The arbitrator later issued a second award clarifying issues regarding the dates of the suspension and backpay.
Plaintiffs filed this action to enforce the arbitration awards. Defendant filed a counterclaim against plaintiffs and a third-party claim against Plesa for vacation of the arbitration awards and to recover compensation for improperly awarded backpay. Plaintiffs and Plesa moved for summary disposition, and defendant moved for summary disposition in its favor. The trial court concluded that the arbitrator exceeded his authority by ordering Plesa's reinstatement contrary to Plesa's separation waiver, and therefore vacated the arbitration awards. Plaintiffs and Plesa objected to a proposed order submitted by defendant, and also to defendant's amended proposed judgment. The trial court signed defendant's first proposed order without holding a hearing on plaintiffs' objections. This appeal followed.
Preliminarily, plaintiffs and Plesa argue that defendant lacked standing to assert the separation waiver as grounds for establishing that the arbitrator lacked authority to reinstate Plesa. We disagree.
"The purpose of the standing doctrine is to assess whether a litigant's interest in the issue is sufficient to ensure sincere and vigorous advocacy." Lansing Sch Ed Ass'n v Lansing Bd of Ed, 487 Mich. 349, 355; 792 N.W.2d 686 (2010). "Thus, the standing inquiry focuses on whether a litigant is a proper party to request adjudication of a particular issue and not whether the issue itself is justiciable." Id. "[S]tanding refers to the right of a party plaintiff initially to invoke the power of the court to adjudicate a claimed injury in fact. . . ." Federated Ins Co v Oakland Co Rd Comm, 475 Mich. 286, 290-291; 715 N.W.2d 846 (2006). "A litigant may have standing . . . if the litigant has a special injury or right, or substantial interest, that will be detrimentally affected in a manner different from the citizenry at large . . . ." Lansing Sch Ed Ass'n, 487 Mich. at 372.
Defendant argues that it has standing to enforce retirement terms that arise from the CBA and retirement ordinance. Defendant emphasizes that WCERS is the administrator of retirement plans for defendant's employees. Defendant asserts that the retirement application form and its contents were implemented to enforce defendant's contractual rights and obligations. We agree that defendant has a legitimate interest in ensuring that it is not employing persons who are ineligible for active employment. The CBA, the retirement ordinance, and the WCERS rules operate jointly in governing members' rights and obligations. Article 30 of the CBA incorporates by reference defendant's retirement ordinance, which delegates plan administration to WCERS, pursuant to MCL 46.12a(12). The employment relationship between defendant and its employees thus involves rights and obligations that overlap with the contractual relationship between WCERS and its members. If, as defendant contends, WCERS members who receive retirement benefits are ineligible for active employment, defendant has an interest in avoiding employment of ineligible retirees.
Therefore, defendant had standing to raise the issue that Plesa's retirement agreement precluded his reinstatement. Because general principles of standing permit defendant to raise this issue, it is not necessary to address defendant's alternative argument that it has standing as a third-party beneficiary of WCERS's contract with Plesa.
Plaintiffs and Plesa also argue that the trial court erred by ruling that Plesa's retirement application and withdrawal of his retirement funds precluded him from receiving reinstatement and backpay. We disagree.
Plaintiffs and Plesa sought to enforce the arbitration awards in motions for summary disposition under MCR 2.116(C)(10). In response, defendant sought judgment in its favor under MCR 2.116(I)(2). A trial court's decision on a motion for summary disposition is reviewed de novo. Pontiac Police & Fire Retiree Prefunded Group Health & Ins Trust Bd of Trustees v Pontiac, 309 Mich.App. 611, 617; 873 N.W.2d 783 (2015). "A motion under MCR 2.116(C)(10) tests the factual support of a plaintiffs claim." Zaher v Miotke, 300 Mich.App. 132, 139; 832 N.W.2d 266 (2013) (quotation marks and citation omitted). "A trial court may grant a motion for summary disposition under MCR 2.116(C)(10) when the affidavits or other documentary evidence, viewed in the light most favorable to the nonmoving party, show that there is no genuine issue as to any material fact and the moving party is therefore entitled to judgment as a matter of law." Lowrey v LMPS & LMPJ, Inc, 500 Mich. 1, 5; 890 N.W.2d 344 (2016). When deciding a motion for summary disposition, "[i]f it appears to the court that the opposing party, rather than the moving party, is entitled to judgment, the court may render judgment in favor of the opposing party." MCR 2.116(I)(2).
"This Court reviews de novo a circuit court's decision whether to vacate an arbitration award." TSP Servs, Inc v Nat'l-Standard, LLC, 329 Mich.App. 615, 619-620; 944 N.W.2d 148 (2019). "Judicial review of an arbitrator's decision is narrowly circumscribed." City of Ann Arbor v AFSCME Local 369, 284 Mich.App. 126, 144; 771 N.W.2d 843 (2009). Id. (citations omitted). But a court may review whether an arbitrator acted within the scope of his or her authority. 36th Dist Court v Mich. AFSCME Council 25, Local 917, 295 Mich.App. 502, 508-509; 815 N.W.2d 494 (2012), rev'd in part on other grounds 493 Mich. 879 (2012).
Preliminarily the parties dispute the scope of the trial court's authority to review an arbitration award, specifically with respect to the arbitrator's interpretation of the CB A. Defendant argues that the principles enunciated in Detroit Auto Inter-Ins Exch v Gavin, 416 Mich. 407; 331 N.W.2d 418 (1982), also apply to arbitrations in labor disputes. Gavin involved an arbitration conducted pursuant to an arbitration clause in an insurance policy. The arbitration agreement provided for statutory arbitration governed by MCL 600.5001 et seq., repealed by 2012 PA 370.[1]The issue in Gavin was whether the arbitrator erred by finding that four automobile no-fault insurance policies could be stacked to allow the injured insured party to receive the maximum benefit under...
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