TR. AUTH. v. TRANSP. WORKERS

• Decision Date: 10 October 2002
• Citation: 780 N.E.2d 490,99 N.Y.2d 1,750 N.Y.S.2d 805
• Parties: In the Matter of NEW YORK CITY TRANSIT AUTHORITY, Respondent, v. TRANSPORT WORKERS UNION OF AMERICA, LOCAL 100, AFL-CIO, et al., Appellants. In the Matter of NEW YORK CITY TRANSIT AUTHORITY et al., Respondents, v. TRANSPORT WORKERS UNION OF AMERICA, LOCAL 100, AFL-CIO, et al., Appellants.
• Court: New York Court of Appeals Court of Appeals

99 N.Y.2d 1

780 N.E.2d 490

750 N.Y.S.2d 805

In the Matter of NEW YORK CITY TRANSIT AUTHORITY, Respondent, v. TRANSPORT WORKERS UNION OF AMERICA, LOCAL 100, AFL-CIO, et al., Appellants.

In the Matter of NEW YORK CITY TRANSIT AUTHORITY et al., Respondents, v. TRANSPORT WORKERS UNION OF AMERICA, LOCAL 100, AFL-CIO, et al., Appellants.

Court of Appeals of the State of New York.

Argued September 4, 2002.

Decided October 10, 2002.

Kennedy, Schwartz & Cure, P.C., New York City (Arthur Z. Schwartz and Elizabeth M. Pilecki of counsel), for appellants in the first and second above-entitled proceedings.

Richard Schoolman, Brooklyn, and David Boyle for respondent in the first and second above-entitled proceedings.

Michael A. Cardozo, Corporation Counsel, New York City (Alan Beckoff and Stephen J. McGrath of counsel), for City of New York in the first and second above-entitled proceedings, amicus curiae.

Chief Judge KAYE and Judges SMITH, CIPARICK, WESLEY, ROSENBLATT and GRAFFEO concur.

OPINION OF THE COURT

LEVINE, J.

We granted leave to appeal in these cases to consider whether the courts below properly vacated two arbitration awards as violative of public policy. Each award modified the penalty of dismissal imposed by respondent New York City Transit Authority (NYCTA) or its subsidiary, Manhattan and Bronx Surface Transit Operating Authority (MABSTOA) for employees' violations of safety rules and, instead, imposed less severe sanctions. We reverse in both cases and reinstate the arbitration awards.

The Rodriguez Case

In the first case under review, David Rodriguez was a subway train operator for 16 years. His prior disciplinary record consisted of two suspensions for safety rule violations. A November 20, 1998 accident led to his dismissal by NYCTA. He had failed to set the hand brake on a nonpassenger work train when shutting it down, resulting in a collision with another train and his train's derailment. No one was injured. Some two weeks before the accident, Rodriguez attended a refresher training course which taught the need to set the hand brake under the same circumstances. NYCTA dismissed Rodriguez without pay effective December 10, 1998. His representative, Transport Workers Union of America, grieved that disciplinary action pursuant to the terms of its collective bargaining agreement with NYCTA. After a hearing before a tripartite arbitration panel (as provided in that agreement), the arbitrators upheld NYCTA's finding of Rodriguez's misconduct. However, in a decision dated January 22, 1999, the panel, by a two-to-one vote (NYCTA's representative dissenting) determined that the penalty of dismissal was excessive, given his long tenure of service with only two prior "operational violations." "[B]ased upon the record as a whole and the parties [sic] progressive disciplinary policies," the panel reduced the penalty to time served without pay and a demotion for up to six months.

NYCTA then brought this proceeding pursuant to CPLR article 75 to vacate the award, and the union cross-petitioned to confirm. Supreme Court ruled in the union's favor. The Appellate Division reversed (279 AD2d 474) and vacated the arbitrators' reduction of the penalty and reinstatement of Rodriguez. The Court relied on the statutory duty of NYCTA to operate the transit system for the safety of the public, as provided in Public Authorities Law § 1204 (15). It held that "[r]equiring the NYCTA to reinstate an employee who has been found to be a threat to public safety is contrary to public policy" (id. at 474).

The Bright Case

Leroy Bright was a MABSTOA bus driver for over 20 years. On June 11, 1999, his bus struck and injured a pedestrian. He was suspended without pay (effective that day) in contemplation of dismissal. Appellant Transport Workers Union invoked the grievance/arbitration procedure of the collective bargaining agreement on his behalf, and a hearing was held before a single arbitrator. Following the hearing, the arbitrator, on October 25, 1999, issued an award. The arbitrator rejected Bright's exculpatory version of the accident and sustained the charge that he caused a preventable accident. The arbitrator, however, declined to impose the "ultimate penalty" of dismissal, instead ordering reinstatement without back pay and declaring that the disposition was to "serve as a final warning" that a similar violation would put Bright at risk of termination. On the petition of NYCTA and MABSTOA, Supreme Court vacated the arbitrator's award insofar as it reduced the sanction from dismissal to a suspension without pay, on the ground that it was against the public policy embodied in Public Authorities Law § 1204 (15). The Appellate Division affirmed (280 AD2d 677).

I

Our courts have long since abandoned their distrust and hostility toward arbitration as an alternative means for the resolution of legal disputes, in favor of a policy supporting arbitration and discouraging judicial interference with either the process or its outcome (see Matter of Sprinzen [Nomberg], 46 NY2d 623, 629 [1979]). Under our modern arbitration jurisprudence, judicial intervention on public policy grounds constitutes a narrow exception to the otherwise broad power of parties to agree to arbitrate all of the disputes arising out of their juridical relationships, and the correlative, expansive power of arbitrators to fashion fair determinations of the parties' rights and remedies.

We articulated the limited role of the public policy exception as applying only in

"cases in which public policy considerations, embodied in statute or decisional law, prohibit, in an absolute sense, particular matters being decided or certain relief being granted by an arbitrator. Stated another way, the courts must be able to examine an arbitration agreement or an award on its face without engaging in extended factfinding or legal analysis, and conclude that public policy precludes its enforcement." (Matter of Sprinzen, 46 NY2d at 631 [emphasis supplied].)

Judicial restraint under the public policy exception is particularly appropriate in arbitrations pursuant to public employment collective bargaining agreements. In those instances, the Legislature in the Taylor Law explicitly adopted a countervailing policy "encouraging such public employers and such employee organizations to agree upon procedures for resolving disputes" (Civil Service Law § 200 [c]), as a means of promoting harmonious relations between governmental employers and their employees, and preventing labor strife endangering uninterrupted governmental operations (see Matter of Board of Educ. of Yonkers City School Dist. v Yonkers Fedn. of Teachers, 40 NY2d 268, 273 [1976]

; Board of Educ. v Associated Teachers of Huntington, 30 NY2d 122, 131 [1972]).

The Taylor Law was passed to provide the means for achieving labor peace in the public sector, and for resolving the disputes which resulted in severe work stoppages under prior law. In his memorandum of approval of the Taylor Law, Governor Rockefeller stated:

"The necessity of this law has been unquestionably demonstrated over the years by the utter inadequacy of the Condon-Wadlin Law to resolve paralyzing strikes and threats of strikes by public employees" (1967 Legis Ann at 273).

The critical role of collective bargaining agreements' grievance/arbitration machinery in stabilizing labor relations has been well recognized. More than 40 years ago, Justice Douglas wrote that "arbitration [of labor disputes] is the substitute for industrial strife [and] * * * has quite different functions from arbitration under an ordinary commercial agreement * * *. For arbitration of labor disputes under collective bargaining agreements is part and parcel of the collective bargaining process itself" (United Steelworkers v Warrior & Gulf Nav. Co., 363 US 574, 578 [1960]).

Additionally, in labor disputes, arbitrators are mutually chosen by labor and management because of their particular expertise and insight into the relationship, needs of the parties, conditions existing in the specific bargaining unit, and the parties' "trust in [the arbitrator's] personal judgment to bring to bear considerations which are not expressed in the contract * * *. The ablest judge cannot be expected to bring the same experience and competence to bear upon the determination of a grievance, because [the judge] cannot be similarly informed" (id. at 582).

II

The public policy consideration invoked by the Authorities in the instant cases to vacate the arbitration awards manifestly fails to meet the strict standards for overturning such awards on public policy grounds that have been developed in the case law. The narrowness of the public policy exception, as applied to the arbitration process under collective bargaining agreements, is designed to ensure that courts will not intervene in this stage of the collective bargaining process in pursuit of their own policy views, or because they simply disagree with the arbitrator's weighing of the policy considerations.

In both cases, the Authorities entered into collective bargaining agreements that required the arbitration of disputes regarding employee discipline. However, they argued below, and the Appellate Division agreed, that the awards should be vacated as violative of the general statutory powers granted to NYCTA and MABSTOA under the Public Authorities Law: "[t]o exercise all requisite and necessary authority to manage, control and direct the maintenance and operation of transit facilities * * * for the convenience and safety of the public" (Public Authorities Law § 1204 [15]).

This provision can only form the basis for vacating the awards if we are able to conclude, "without engaging in any extended factfinding or legal analysis" that it "prohibit[s], in an absolute sense, [the] particular matters [to be] decided or certain relief being granted" (Matter of Sprinzen, 46 NY2d at 631; Matter of Town of Haverstraw [Rockland County Patrolmen's...