Rochester City School Dist. v. Rochester Teachers Ass'n

• Decision Date: 07 April 1977
• Citation: 394 N.Y.S.2d 179,41 N.Y.2d 578,362 N.E.2d 977
• Court: New York Court of Appeals Court of Appeals
• Parties: , 362 N.E.2d 977, 95 L.R.R.M. (BNA) 2118 ROCHESTER CITY SCHOOL DISTRICT, Respondent, v. ROCHESTER TEACHERS ASSOCIATION, Appellant.

Page 179

394 N.Y.S.2d 179

41 N.Y.2d 578, 362 N.E.2d 977, 95

L.R.R.M. (BNA) 2118

ROCHESTER CITY SCHOOL DISTRICT, Respondent, v. ROCHESTER TEACHERS ASSOCIATION, Appellant.

Court of Appeals of New York.

April 7, 1977.

Bernard F. Ashe and Gerard John DeWolf, Albany, for appellant.

Adam D. Kaufman, Rochester, for respondent.

WACHTLER, Judge.

In a proceeding to vacate an arbitration award the petitioner, Rochester City School District, claims that the arbitrator appointed pursuant to a collective bargaining agreement "exceeded his power" (CPLR 7511, subd. (b), par. 1, cl. (iii)) in the course of resolving a dispute over sabbatical leaves. Special Term vacated the award and denied a cross motion to confirm it. The Appellate Division affirmed and we granted leave to appeal upon the motion of the respondent, Rochester Teachers Association.

The parties entered into a collective bargaining agreement for the school years beginning July 1, 1971 and ending June 30, 1973. Section 34.5 of the agreement provides that "Regularly appointed teachers who have served for five (5) years may upon the recommendation of the Superintendent and with the approval of the Board, be granted leave of absence for study or travel upon" certain conditions. The agreement also established a four "stage" procedure for the resolution of any grievance which is defined as "a claim based upon an event or condition which affects the conditions or circumstances under which a teacher works, allegedly caused by misinterpretation or inequitable application of established policy or the terms of this agreement." The first three stages involve meetings with the teacher's immediate supervisor, the superintendent of schools and the board of education. The fourth stage provides for binding arbitration. The agreement states "if the teacher and/or Association are not satisfied with the decision at Stage 3, and the Association determines that the grievance is meritorious, it may submit the grievance to arbitration. * * * The decision of the arbitrator shall be final and binding upon all parties."

During the 1972-1973 school year 36 teachers applied for sabbatical leave. In each case the teacher received a form letter which states "Your application has been considered, but as an economy measure, among other reasons, the Superintendent of Schools is not recommending to the Board of Education your request for a sabbatical leave for the 1973-74 school year." On April 19, 1973 the Teachers Association filed a group grievance claiming that the action of the district and the board of education violated section 34.5 of the collective bargaining agreement. The association was unsuccessful during the initial stages of the grievance procedure. At the third stage the association was informed in writing that "it is the determination of the Board of Education that the language in the current collective bargaining agreement regarding the granting of sabbatical leaves is permissive and does not confer any contractual right to sabbatical leaves upon the employees. Under the current language, the Superintendent may or may not recommend the granting of sabbatical leaves. Because of the severe financial situation facing the City School District, the Superintendent has determined not to grant any sabbatical leave requests for the 1973-74 school year and we concur with the determination." (Emphasis in original.)

The association then demanded arbitration and the following questions were submitted by the parties:

"1. Did the Rochester City School District violate Section 34.5 of the collective bargaining agreement between the parties in denying all sabbatical leaves for the 1973-74 school year?

"2. If such a violation is found, what remedies in the judgment of the arbitration shall be provided?"

After conducting hearings the arbitrator found that the grievance had been sustained. The use of the term "may" he stated, "indicates discretion", but has been variously interpreted depending upon the intention of the parties. He recognized that in one case, an article 78 proceeding involving an identical provision and a similar controversy, the court had held the clause to be permissive (see Matter of Deedy v. Board of Educ., 41 A.D.2d 965, 344 N.Y.S.2d 991, mot. for lv. to app. den. 33 N.Y.2d 515, 348 N.Y.S.2d 1026, 302 N.E.2d 553). However, he did not feel bound by that ruling in an arbitration forum and, in any event, in his view it did not resolve the question as to what these parties intended the contractual language to mean under the circumstances of this case.

This particular provision, he noted, had first been adopted by these parties in a 1965 collective bargaining agreement and since that time "even when the District had been in the throes of financial crisis, sabbatical leaves were consistently and uniformly granted under the terms of the provision." In fact the school district had actively broadcast the advantages of its leave policy in teacher recruitment literature and had, in the 1971 agreement granted the teachers' demands for additional benefits by relaxing the conditions and increasing by 10% the amount of compensation paid to teachers on leave. Thus, looking to the past practice followed by the parties, to find intent, the arbitrator concluded that it was contemplated that the school district would be bound to grant some sabbaticals despite financial difficulties. He directed that the school district grant sabbaticals to those eligible teachers who applied for leave in the 1973-1974 school year "to a total of no more than 1% of the total teachers employed". ^*

The school district then commenced this proceeding to vacate the award claiming that the arbitrator "exceeded his power" (CPLR 7511, subd. (b), par. 1, cl. (iii)). The petition alleges that under the collective bargaining agreement the granting of sabbatical leave is discretionary and that in holding to the contrary the arbitrator ignored (1) "the express contractual language" and (2) the decision in Deedy (supra), "a ruling on the specific issue before him". Thus, it concludes, the arbitrator exceeded his power by modifying or altering the agreement in violation of the arbitration clause which states "The arbitrator shall have no power or authority to make any decision which * * * adds to, deletes from, or in any way changes, alters or modifies the terms of the Agreement."

Special Term recognized that an arbitrator's award cannot be set aside for "mere error" of law. But it concluded that here the arbitrator had in fact exceeded his powers because he disregarded an express contractual provision (Matter of Granite Worsted Mills (Aaronson Cowen, Ltd.), 25 N.Y.2d 451, 306 N.Y.S.2d 934, 255 N.E.2d 168). Specifically it held that the leave provision involved a "discretionary procedure" and when "the arbitrator construed this provision as a mandatory requirement on the part of the employer, he changed a provision of a negotiated contract which he had no power to do." The Appellate Division later affirmed, without opinion.

Once a party has participated in arbitration his ability to have the courts vacate or modify the award is limited by statute (CPLR 7511, subd. (b), par. 1; see, also CPLR 7511, subd. (c)). An award of course may be vacated on the ground that the arbitrator "exceeded his power" (CPLR 7511, subd. (b), par. 1, cl. (iii)). But when the arbitrator has been authorized to resolve disputes regarding the interpretation of the contract, we have held that his determination will only be set aside on this ground if it is "completely irrational" (Matter of National Cash Register Co. (Wilson), 8 N.Y.2d 377, 383, 208 N.Y.S.2d 951, 955, 171 N.E.2d 302, 305), "or where the document expressly limits or is construed to limit the powers of the arbitrators, hence, narrowing the scope of arbitration (Matter of Granite Worsted Mills (Cowen), supra, 25 N.Y.2d...