Port Huron Area School Dist. v. Port Huron Educ. Ass'n

• Decision Date: 03 October 1986
• Docket Number: Docket No. 72647
• Parties: PORT HURON AREA SCHOOL DISTRICT, Plaintiff-Appellant, v. PORT HURON EDUCATION ASSOCIATION, Defendant-Appellee. 426 Mich. 143, 393 N.W.2d 811, 123 L.R.R.M. (BNA) 3293, 42 Empl. Prac. Dec. P 36,830, 35 Ed. Law Rep. 277
• Court: Michigan Supreme Court

Page 811

393 N.W.2d 811

PORT HURON AREA SCHOOL DISTRICT, Plaintiff-Appellant, v. PORT HURON EDUCATION ASSOCIATION, Defendant-Appellee.

Docket No. 72647.

426 Mich. 143, 393 N.W.2d 811, 123 L.R.R.M. (BNA) 3293,

42 Empl. Prac. Dec. P 36,830, 35 Ed. Law Rep. 277

Supreme Court of Michigan.

Argued March 6, 1986.

Decided Oct. 3, 1986.

Touma, Watson, Nicholson, Whaling, Fletcher & DeGrow, Port Huron, for plaintiff-appellant.

Levin, Levin, Garvett and Dill by Erwin B. Ellmann, Eli Grier, Southfield, for defendant-appellee.

RILEY, Justice.

The question presented concerns the limited scope of judicial review of labor arbitration awards in situations in which it is claimed that the arbitrator exceeded his contractual authority in granting an award. We hold that, in the present case, in light of the express contractual limitations upon arbitral jurisdiction and authority reflected in the arbitration agreement, the award is unenforceable. In granting the award, the arbitrator clearly exceeded the scope of his authority as expressly circumscribed in the arbitration contract.

I

In accordance with the labor agreement between the Port Huron Area School District and the Port Huron Education Association, the school district instituted layoffs in the spring of 1980, because of financial difficulties the school district was experiencing. Prior to 1980, it had always been possible to have at least one male and one female physical education teacher on duty for all of the classes. Additionally, teachers' aides (of the same sex as their assigned students) had been employed to assist in locker room supervision when it had not been possible to match teachers of the same sex as the students with the position in one previous year. The teacher's aide positions, however, were eliminated during the 1979-80 school year in an overall austerity program to address the financial problems experienced by the school district. ¹ The school district established a procedure by which it would have both a male and a female physical education instructor at each of its two high schools and that these instructors would be of the same sex as their students and be responsible, without the assistance of aides, for locker room supervision which consumes approximately twenty-five percent of the teachers' time. During the restaffing process, it appears that one male physical education teacher resigned and was replaced by a laid-off male teacher. There also appears to have been a rescheduling error and the recalled male teacher was assigned a teaching schedule which included some time periods when he would be the only teacher on duty and, thus, the only supervisor on duty for the girls' locker room. The school district resolved this error by adjusting the teaching schedules, thereby creating a vacancy for the position of girls' physical education teacher. Consistent with the same sex qualifications previously established by the school district, and the policy decision to eliminate the employment of teachers' aides, the most senior available male teacher was passed over, and the position was offered to the most senior available female physical education teacher. The male teacher was given another assignment in the school district.

The male teacher who was passed over filed a grievance on September 19, 1980, alleging that he was the most senior qualified teacher to hold the position and that he was not offered the position in violation of the recall and seniority provisions incorporated in Article II of the collective bargaining agreement. Section 3, paragraphs C(3)(e) and 4(c) of that article read as follows:

"If a vacancy arises for which a teacher on layoff is qualified, the District shall notify such teacher of the vacancy in writing by certified mail notice....

* * *

"In the event that anyone on the Placement List resigns, the Division for Personnel Administration shall take action to issue a contract to the next available teacher on the Seniority List who qualifies for the vacancy."

The grievant asked that the position in question be given him.

The employer, responding on October 22, 1980, denied the grievance, asserting that the grievant was not offered the position because he was not a teacher who qualified for the vacancy:

"One of the qualifications used by the District during the placement and staffing process was that a teacher who teaches girls physical education classes must be a female instructor in order to provide locker room supervision. As there would have been no afternoon female physical education teacher at Port Huron High School if Mr. Grinder had been recalled from layoff to that position, it was necessary that we recall the next female physical education teacher, which we did. Mr. Grinder did not meet the qualifications required to fill the position, therefore, there is no violation of the Agreement and the grievance is denied."

The grievance proceeded to arbitration, ² and the hearing was conducted on May 26, 1981. The arbitrator upheld the grievance, finding that the use of gender as a criteria in offering the girls' physical education teaching position violated the professional agreement. The arbitrator, in his written opinion, expressly found that the use of sex as a qualification was prohibited by the Preamble of the contract, and that his authority, consistent with arbitral jurisdiction generally, ³ extended to determining whether the school district's management decision was "reasonable and necessary." The arbitrator concluded that the school district had not established the "reasonableness and necessity" of its management decision, that the use of sex as a qualification was prohibited by the Preamble of the contract, and, therefore, that pursuant to the seniority provisions of the contract, the grievant was entitled to the girls' physical education position, notwithstanding the required locker room supervision responsibilities. The arbitrator emphasized that his decision did not authorize other sex supervision and, apparently, implied that the school district must increase its staff to execute that function.

The school district commenced the present action in circuit court on September 16, 1981, seeking to have the award set aside as being in excess of the arbitrator's jurisdiction and authority which was expressly limited and circumscribed by provisions of the arbitration contract. The education association answered, asking the court to confirm the award, and the matter was submitted on cross-motions for summary judgment. ⁴ The circuit court granted the school district's motion and set aside the arbitration award on the ground that the arbitrator clearly exceeded his contractual authority in granting the award.

The education association appealed, and the Court of Appeals reversed in an unpublished opinion. We granted the school district's application for leave to appeal. 422 Mich. 856 (1985).

II

The parties are generally in agreement with regard to the law to be applied in this case. It is well-settled that arbitration is a favored means of resolving labor disputes and that courts refrain from reviewing the merits of an arbitration award when considering its enforcement. To that extent, judicial review of an arbitrator's decision is very limited; a court may not review an arbitrator's factual findings or decision on the merits.

The United States Supreme Court expressed the federal policy of judicial deference in the context of labor arbitration in the celebrated Steelworkers' Trilogy. ⁵ This Court expressed its general acceptance of such a policy, similarly, in Frazier v. Ford Motor Co., 364 Mich. 648, 112 N.W.2d 80 (1961). See Carr v. Kalamazoo Vegetable Parchment Co., 354 Mich. 327, 92 N.W.2d 295 (1958). See also Kaleva-Norman-Dickson School Dist. v. KND Teachers' Ass'n, 393 Mich. 583, 227 N.W.2d 500 (1975).

The legal basis underlying this policy of judicial deference is grounded in contract: the contractual agreement to arbitrate and to accept the arbitral decision as "final and binding." Labor arbitration is a product of contract, and, therefore, its legal basis depends entirely upon the particular contracts of particular parties. Arbitration contracts may vary, according to their specific terms, in the scope of the matters entrusted to final and binding arbitration, and in the arbitral authority conferred to resolve disputes concerning such matters. ⁶ An arbitrator's jurisdiction and authority to resolve a particular dispute concerning the appropriate interpretation of a collective bargaining agreement derives exclusively from the contractual agreement of the parties; an arbitrator possesses no general jurisdiction to resolve such matters independent of the arbitration contract. ⁷

There is no contention, in the present case, that the merits of the award here in question are subject to review. The only issue is whether the arbitrator, in granting the award, disregarded the terms of his employment and the scope of his authority as expressly circumscribed in the arbitration contract. Parties consenting to arbitration pursuant to written agreements consent to arbitrate within the framework of the terms and conditions of such agreements. An arbitrator who refuses to recognize the terms and conditions expressly circumscribing his jurisdiction and authority in resolving a submitted dispute, thereby exceeding the limits upon which the contractual submission is based, exceeds the consensual authority bestowed upon him by the contract, and the award resulting therefrom is without legal sanction. Whether an arbitrator exceeded his contractual authority is an issue for judicial determination. This well-established principle is within the limited scope of judicial review of labor arbitration awards and was articulated by the United States Supreme Court in United Steelworkers v. Enterprise Wheel & Car Corp., 363 U.S. 593, 597, 80 S.Ct. 1358, 1361, 4 L.Ed.2d 1424 (1960):

"[A]n arbitrator is confined to...