Mount St. Mary's Hospital of Niagara Falls v. Catherwood

• Decision Date: 14 May 1970
• Docket Number: AFL-CI,I
• Citation: 26 N.Y.2d 493,311 N.Y.S.2d 863,260 N.E.2d 508
• Parties: , 260 N.E.2d 508, 74 L.R.R.M. (BNA) 2897, 63 Lab.Cas. P 52,368 MOUNT ST. MARY'S HOSPITAL OF NIAGARA FALLS, Appellant, v. Martin P. CATHERWOOD, as Industrial Commissioner, et al., Respondents, and Buffalo and Western New York Hospital and Nursing Home Council,ntervenor-Respondent.
• Court: New York Court of Appeals Court of Appeals

Page 863

311 N.Y.S.2d 863

26 N.Y.2d 493, 260 N.E.2d 508, 74

L.R.R.M. (BNA) 2897,

63 Lab.Cas. P 52,368

MOUNT ST. MARY'S HOSPITAL OF NIAGARA FALLS, Appellant, v. Martin P. CATHERWOOD, as Industrial Commissioner, et al Respondents, and Buffalo and Western New York Hospital and Nursing Home Council AFL-CIO, Intervenor-Respondent.

Court of Appeals of New York.

May 14, 1970.

Francis V. Cole, John F. Donovan and James Fox, Buffalo, for appellant.

Louis J. Lefkowitz, Atty. Gen. (Alan W. Rubenstein and Ruth Kessler Toch, Albany, of counsel), for Martin P. Catherwood, respondent.

Grace Marie Ange, Buffalo, for intervenor-respondent.

Carl R. Krause and Richard N. Chapman, Rochester, for Hospital Association of New York State, Inc., amicus curiae.

BREITEL, Judge.

At issue is the constitutionality of section 716 of the Labor Law, Consol.Laws, c. 31, providing among other things for the compulsory arbitration of disputes in labor contract negotiations with private voluntary or nonprofitmaking hospitals. Mount St. Mary's Hospital, such a hospital in dispute with a labor union, brought this action for a declaratory judgment to invalidate the compulsory arbitration features of the statute. It appeals as of right on constitutional grounds from adverse decisions sustaining the statute (CPLR 5601, subd. (b)).

Section 716 (L.1963, ch. 515, § 5, as amd. by L.1969, ch. 526, §§ 1--3) provides that every collective bargaining contract between employees and nonprofitmaking hospitals or residential care centers shall be deemed to include provisions for mediation and final binding arbitration, at the request of both parties, or by motion of the State Industrial Commissioner, of disputes arising in the course of negotiating terms of a new collective bargaining contract (subds. 1, 3, par. (b)). Even if there is no existing collective bargaining agreement there is a similar procedure for compulsory arbitration provided to mandate the terms of a collective bargaining contract between the parties (subd. 4). Grievances, as defined, arising out of an existing collective bargaining contract are also subject to arbitration, at the request of either party (subds. 1, 2). It is interesting to observe that in the last instance either party may invoke compulsory arbitration, in contrast to the situation where the making of a contract is in dispute, in which case only the Industrial Commissioner may order arbitration if both parties have not agreed to such arbitration. Application to confirm, modify, correct or vacate an arbitration award shall be made in accordance with CPLR article 75, the article governing arbitration generally (subd. 6, par. (b)).

After protracted negotiations, initiated in 1965, the hospital failed to reach a collective bargaining agreement with the employees' bargaining representative (Buffalo and Western New York Hospital and Nursing Home Council, AFL-CIO). Following unsuccessful mediation, the Industrial Commissioner directed that the dispute be submitted to compulsory arbitration pursuant to section 716. One William A. Hazell was originally appointed arbitrator, but his designation was withdrawn during the pendency of the proceeding in Special Term and the State Mediation Board was designated as arbitrator in his stead.

Thus far the hospital has not submitted to arbitration. It urges that review of the arbitrator's decision under CPLR article 75, the only mode of review expressly provided by section 716, is inadequate to provide the hospital due process of law under Federal and State constitutional limitations (U.S.Const., 14th Amdt., § 1; N.Y.Const., art. I, § 6). Because article 75, if given a broad rather than a narrow interpretation, encompasses a standard of review sufficient to afford the parties due process in the context of compulsory arbitration as mandated by section 716 of the Labor Law, the statute is valid and the order of the Appellate Division should be affirmed. 33 A.D.2d 635, 305 N.Y.S.2d 143.

Although two cases involving section 716 have been before the court, neither necessarily involved the statute's constitutionality or the narrower question of scope of judicial review of awards in compulsory arbitration. Thus, Long Island College Hospital v. Catherwood, 23 N.Y.2d 20, 294 N.Y.S.2d 697, 241 N.E.2d 892 held that questions of certification of bargaining representatives were not subject to arbitration as 'disputes'. In Park Ave. Clinical Hospital v. Kramer, 19 N.Y.2d 958, 281 N.Y.S.2d 359, 228 N.E.2d 411, affg. 26 A.D.2d 613, 271 N.Y.S.2d 747 the court sustained a determination that a constitutional challenge was premature, as the union there had only filed a petition for certification as bargaining agent, and there had been no employee vote, no certification or negotiation, and most important, no bargaining impasse or order to arbitrate. The particular issue of the constitutionality of judicial review afforded arbitration awards under section 716 was not at issue or considered.

Compulsory arbitration to resolve labor disputes, and to resolve or avoid work stoppages, particularly in industries affected with a large and direct public interest, such as the service utilities and railroads, has been discussed through most of the decades of this century, especially between the two world wars. The notion has been said to be abhorrent both to labor and management, suggestive of excessive government control of labor relations and loss of freedom to determine one's own economic fate. As a result compulsory arbitration has been used hardly at all and there is a dearth of legal analysis and precedent in the courts to illuminate the principles to be applied to this drastic remedy.

Initial delays and litigation have attended upon this State's legislative efforts to avert labor stoppages and strife in the voluntary hospital field (see, e.g., Long Island College Hospital v. Catherwood, 23 N.Y.2d 20, 294 N.Y.S.2d 697, 241 N.E.2d 892, Supra; Park Ave. Clinical Hospital v. Kramer, 19 N.Y.2d 958, 281 N.Y.S.2d 359, 228 N.E.2d 411, Supra). The reason is plain. The problems are new and especially troublesome because they involve the illegalization of the right to strike by private workers in hospitals and, therefore, the necessity of substitute provision to safeguard their economic rights and to offset the curtailment of their bargaining power.

In the present case it is the employing hospital which has resisted the newly created machinery for resolving the disputes with the labor union to which it has been adversary. On the other hand, the labor union, deprived of the right to strike, has sought to avail itself of the dispute-determination machinery by certification of labor representatives, negotiation, mediation, and, finally, compulsory arbitration.

At the inception it should be observed that the essence of arbitration, as traditionally used and understood, is that it be voluntary and on consent. The introduction of compulsion to submit to this informal tribunal is to change its essence. (Domke, Commercial Arbitration, p. 5.) It is very easy to transfer, quite fallaciously, notions and principles applicable to voluntary arbitration to 'compulsory' arbitration, because, by doubtful logic but irresistible usage, both systems carry the descriptive noun 'arbitration' in their names. The simple and ineradicable fact is that voluntary arbitration and compulsory arbitration are fundamentally different if only because one may, under our system, consent to almost any restriction upon or deprivation of right, but similar restrictions or deprivations, if compelled by government, must accord with procedural and substantive due process.

For the reasons indicated, provisions for compulsory arbitration of labor disputes have not been widely used in the United States (see, generally, Jones, Compulsion and the Consensual in Labor Arbitration, 51 Va.L.Rev. 369, esp. at pp. 372, 388--392). An early compulsory arbitration statute, enacted in the State of Kansas, was declared unconstitutional by the United States Supreme Court insofar as it applied to businesses preparing food for human consumption (Charles Wolff Packing Co. v. Court of Industrial Relations, 262 U.S. 522, 43 S.Ct. 630, 67 L.Ed. 1103) and coal mining (Dorchy v. Kansas, 264 U.S. 286, 44 S.Ct. 323, 68 L.Ed. 686). The underpinnings for the view concerning industries affected with a public interest have, of course, since then been severely if not fatally, weakened (see Lincoln Federal Labor Union No. 19129 v. Northwestern Iron & Metal Co., 335 U.S. 525, 535--537, 69 S.Ct. 251, 93 L.Ed. 212).

Interest by the States in compulsory labor arbitration surged, however, after World War II, when several enacted compulsory arbitration statutes, and barred strikes in public utilities (see Note, Compulsory Arbitration of Labor Disputes in Public Utilities: A Review of Recent Decisions, 23 Temple L.Q. 221 (1949--1950)). Their significance, however, has been severely limited because since enactment at least one such statute has been held to conflict with the National Labor Relations Act (Amalgamated Ass'n of Street, Electric Railway & Motor Coach Employees v. Wisconsin Employment Relations Bd., 340 U.S. 383, 71 S.Ct. 359, 95 L.Ed. 364).

Litigation in the State courts arising from compulsory arbitration statutes has concentrated on the question of delegation of legislative power, and the necessity for legislated standards to guide the arbitrators (see Ann.--Constitutionality of Arbitration Statutes, 55 A.L.R.2d 432, 445--449). The question of a constitutionally mandated judicial substantive review of an award in compulsory arbitration has rarely arisen because the statutes have generally made provision for such review. Thus, the New Jersey statute provides for a judicial determination of whether the facts found by the arbitrator were supported by 'any evidence' which has been construed to require substantial evidence (N.J.Stat.Ann. 34:13B--23; New Jersey Bell...